Ethereum Prices Crashed on Monday; Whale Dumped His Life Savings
On Feb 22, the price of Ethereum crashed to $700 on Kraken. It now emerges that the flash crash wasn't a mistake. Instead, a whale exiting his position, consequently dumping his life savings. The exchange is still investigating though the founder said its order matching engines remain functional. Even though prices momentarily dipped, the situation could have been exacerbated if they supported margin trading and other derivatives. Ethereum prices are steady but under pressure. Meanwhile, Gas prices have nearly halved to around $20, a relief for DeFi and traders.
esse Powell, the CEO of Kraken, admits that crypto is still like the Wild West, urging for caution. Flash crashes, especially ETH's, are uncharacteristically common. A similar one was posted in Coinbase in 2018 when prices dumped below $30 only to recover in seconds. Nevertheless, Ethereum is solid and is on course to process $1.6 trillion worth of transactions in Q1 2021, according to Messari. Gas prices have nearly halved, falling from $38 registered on Feb 25 to around $20, a boost for traders and especially DeFi users who had to contest with high Gas. Data suggests user outflow to alternative, high through-put EVM-compatible networks like the Binance Smart Chain (BSC).
Impact on ETH Prices:
Neutral. Until when there is a significant reduction in Gas, ETH prices may remain depressed for longer. The flash crash lows of Feb 22 could point to where ETH prices will find support if bears step up. At the moment, traders are bullish. However, a contrarian move may feed bears aiming at $1k in the medium term.
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