Although the broad cryptocurrency market ended 2019 in a fundamentally better state than it did 2018, the overall trend in the transition into 2020 has not been an overwhelmingly positive one. Bitcoin spent the back-half of last year trending down from recent highs by as much as 50% while other major coins like litecoin and ripple approached new 52-week lows.
In spite of these facts, the dimmest outlook in the crypto market circa 2020 is for Ethereum. ETH is down roughly 60% from the 2019 high it set in June and the coin has gotten dangerously close to hitting a key $100 support level.
In addition to the price pressure, ETH has been hit by a series of hurdles and bad news that threaten to challenge the support for the currency through the initial months of the new year.
Is ETH Forked?
One of the most persistent troubles hanging over ETH through 2019 has been the continued delay of Ethereum 2.0, which is planned to switch mining of new currency from a proof-of-work protocol to the more common proof-of-stake. To facilitate this transition, Ethererum’s programmers added a difficulty bomb to the PoW framework that would gradually make mining new blocks in this way more difficult, encouraging greater PoS mining.
However, while the transition to PoS has been delayed, the difficulty bomb has continued ticking within Ethereum’s programming chain. To avoid a total price explosion, Ethereum’s developers have implemented a series of hard forks to offset the eventual switch, including two that happened at the start and end of 2019—Constantinople and Istanbul.
February’s Constantinople and December’s Istanbul hard forks pushed the timeline for the PoS transition all the way to 2022, but they also resulted in depressing ETH’s price below $130 that month as well.
A Test Of ETH
Although these hard forks were necessary to keep the supply of new ether constant, they have disrupted mining operations and introduced greater uncertainty to the stability of Ethereum’s framework. ETH mining has fallen to a daily value below 12,000 coins and a longtime ETH HODLer with more than 300,000 ETH has started migrating his or her coins onto exchanges.
Another wrench has been thrown into ETH just this month. Coinfloor, the U.K.’s longest-running cryptocurrency exchange, announced it would be ending its support for the currency to focus on BTC.
All of this comes as ETH is experiencing a sustained downtrend. Even barring the massive hit the broader cryptocurrency market took in July, ETH has lost $100 in value since August, half of which has been shed off since mid-November.
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All of which leads to the question of where the bottom might be for ETH. Its current trajectory below $130 puts the coin’s nearest support at $120, below which is the critical $100 floor that helped to support the coin during last year’s low.
Should miners and investors continue to migrate away from the world’s second-largest cryptocurrency, 2020 may see ETH hit the floor once again.
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