Ethereum price breaks key ascending trendline support in addition to the massive drop from $250. Ethereum correlation to Bitcoin price to continue but some ERC-20 and DeFi projects break off. Ethereum network is still struggling with congestion; the latest being small transactions by miners. Ethereum has in the last 48 hours bled profusely due to the rejection at $250. The second attempt at clearing the psychological level ended in dire losses as Ethereum spiraled under $230. Support has been established at $225 but gains above $230 are currently unsustainable. ETH/USD is trading at $228 following a 1.53% loss on the day. Other cryptocurrencies such as Bitcoin and Ripple are also in the red as they continue to nurse losses incurred. Industry Overview: Whales swing towards ERC-20 and DeFi tokens It is no news that Ethereum is in a bit of a lull at the moment alongside its older sibling Bitcoin. The latter has been ranging between $9,000 and $10,000 over the last few weeks. Ethereum, on the other hand, continues to dance between $250 and $220. However, whales in the cryptocurrency industry are currently not just accumulating Bitcoin but also looking into other ERC-20 and decentralized finance (DeFi) tokens. Some of the tokens that are getting attention from these large volume investors include Aave (LEND), Ren (REN) and Ox (ZRX) as per the data provided by Santiment, an on-chain data analysis platform. Recently the firm wrote in a post: A few weeks ago, we published an article on the three ERC-20 coins showing the largest accumulation trend by their top non-exchange holders, aka whales. Their price action since? LEND +130%, REN +120%, ZRX +10%. For better or worse, crypto is still a whale’s playground. Ethereum has not been able to break off the correlation to Bitcoin. Perhaps this is the reason for delay in the altcoin season. However, Santiment reckons that some altcoins are currently decoupling from the top two largest cryptos by market capitalization, especially for the projects in the DeFi ecosystem. In other words, there could be a chance for an altcoin season without the involvement of the largest altcoin (Ethereum). It’s pretty obvious that both Bitcoin and Ethereum have fallen into a bit of a lull during the month of June, and with this, the rest of the altcoins (particularly defi projects) are indicating which ones have individual values without the aid of the top two market cap projects pulling them along. Read more: Ethereum Sentiment Overview: Are stablecoin’s killing the Ethereum vibe? Why Defi is mooning as Ethereum lulls Projects in the DeFi ecosystem (mainly supported by Ethereum) have been performing incredibly well in the recent past. However, the same cannot be said for Ethereum which is still struggling under $250. According to Ryan Watkins, an analyst at Messari, “there is no direct reason why ETH needs to rise with DeFi.” Watkins referred to a thesis paper published by Qiao Wang, an ex-Messari product lead who argued that stablecoins like USDT reduced chances of smart contracts platforms benefitting from rallies in DeFi projects and other tokens. This is because Ethereum is no longer the preferred bridge between the fiat world and the digital currency world. Investors continue to seek stability and currently, it is offered by these stablecoins. Some exchanges already offer direct purchase services for DeFi tokens such as Compound on Coinbase. Ethereum network still struggling with congestion Over the last week, activities within the Ethereum network have skyrocketed. It is believed that Ethereum miners are spamming the network with tiny transactions. Reports by Trustnodes show that on Thursday, daily transaction volume hit one million (the highest since 2018). Trustnodes’ opinion is that miners such as Ethermine and Nanopool are sending these small transactions in order to get rewarded for mining them. Note that some of the transactions go as low as 0.001 ETH ($0.25) but the real value is found in mining them. Congestion in the Ethereum network is new. Just this year, the network has been overwhelmed by activities in projects like Tether. In addition, scam projects such as PlusToken and MMM Token are giving the network a hard time. In 2017, CryptoKitties saw the Ethereum network clogged. iFish, on the other hand, made the network sweat in 2018. Ethereum Weekly Forecast: ETH/USD unstoppable to $200 Ethereum bears seem ready and unrelenting in the push to have the price go to levels as low as or below $200. Following another rejection at $250, it became difficult to hold the price above $240 and $230. Ether tested the support at $225 before a recovery ensued. While the crypto’s position above $230 was restored, gains towards $240 have been untenable. Besides, at the time of writing, selling pressure has overburdened the bulls at $230 resulting in more losses. Ether is trading at $228 after breaking below key ascending channel support. Reclaiming this support should be a priority to the bulls because if this break down is followed up by the bears, it will be a miracle to stop Ethereum at $200. From a technical perspective, Ethereum is mainly in the hands of the sellers. The RSI and the MACD clearly confirm the bearish pressure. On the bright side, the price is above the moving averages whereby the 50-day SMA is in line to provide support at $223.16 and the 200-day SMA at $187.13. The gap between the moving averages suggests that all is not lost for the bulls, at least for now. Read more: Ethereum Price Forecast: ETH/USD settles above $230; is $250 still possible before the end of June? ETH/USD daily chart FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street Crypto News share Read Next EUR/JPY Price Analysis: Rising odds for a test of the 200-day SMA FX Street 2 years Ethereum price breaks key ascending trendline support in addition to the massive drop from $250. Ethereum correlation to Bitcoin price to continue but some ERC-20 and DeFi projects break off. Ethereum network is still struggling with congestion; the latest being small transactions by miners. Ethereum has in the last 48 hours bled profusely due to the rejection at $250. The second attempt at clearing the psychological level ended in dire losses as Ethereum spiraled under $230. Support has been established at $225 but gains above $230 are currently unsustainable. 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