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Ethereum plunges many investors into losses as its selling pressure increases.
Ethereum (ETH), the world’s second-largest cryptocurrency by market capitalization, is currently undergoing serious selling pressure as its price drops below $1,800.
Over the last 24 hours, Ethereum has dipped as low as $1,728, thus plunging many addresses holding the cryptocurrency into huge losses.
Fresh data shared by cryptocurrency on-chain data provider Glassnode shows that the number of ETH addresses in losses using the seven-day moving average metric has reached a two-year low.
According to data provided by Glassnode, the number of addresses holding the second-largest cryptocurrency in loss peaked at a two-year high of more than 34 million earlier today.
“#Ethereum $ETH Number of Addresses in Loss (7d MA) just reached a 2-year high of 34,112,307.018,” Glassnode noted today on popular microblogging platform Twitter.
📈 #Ethereum $ETH Number of Addresses in Loss (7d MA) just reached a 2-year high of 34,112,307.018
View metric:https://t.co/eTr2V1rqmQ pic.twitter.com/r26n0G0mfX
— glassnode alerts (@glassnodealerts) May 27, 2022
Terra’s Incident Forces ETH to Plunge
The massive increase in the number of ETH addresses in losses is understandable given that the cryptocurrency has been on a massive decline in recent times.
It is worth noting that in the past two weeks, Ethereum was changing hands above $2,600, as the cryptocurrency looked set to surge above $3,000 at the time.
However, things did not go according to what many people envisaged following the crash of Terra ecosystem tokens, which is considered the main catalyst for the ongoing bear market.
Since the market crash commenced, Ethereum has dipped as low as $1,728, which is a shadow of the coin’s all-time high (ATH) of $4,878 recorded on November 10, 2021.
At press time, Ethereum is changing hands at $1,812, representing a 62.9% dip from its all-time high.
Bitcoin Dominance Mounts Further Pressure on ETH
Meanwhile, the Terra incident is not the only cause of Ethereum’s dip. Since the Terra incident, Bitcoin (BTC) has grown in dominance over other digital currencies in the market, which continues to pile more pressure on ETH.
Bitcoin, which currently has a market cap of $557.2 billion, accounts for 44% of the total cryptocurrency market value, while Ethereum’s dominance is currently at 17.2%.
Commenting on the effect of Bitcoin’s dominance on other cryptocurrencies, Julio Moreno, a senior analyst at CryptoQuant, said in a Bloomberg report:
“Typically, when there’s a correction in crypto markets, altcoins underperform Bitcoin, as they are perceived as higher risk coins than Bitcoin.”
India Economic Times noted that ETH is expected to be under more pressure as a whopping $1 billion option is due to expire this week. Based on the development, investors will be forced to avoid risky investments until things settle.