Today has been a bloodbath for Ethereum (ETH) and the aggregated cryptocurrency market, with Bitcoin’s overnight drop below $7,700 catalyzing a massive selloff that has led virtually all digital assets to plummet 20% or more.
Ethereum is now nearing a critical support level that bulls must defend if they want to guard against further losses, as a break below this single level could prove to be devastating for the cryptocurrency.
This dire price action has come about as the ETH network faces massive congestion, leading its median gas price to skyrocket.
Ethereum Faces Intense Selloff as Network Incurs Massive Congestion
At the time of writing, Ethereum is trading down over 26% at its current price of $138, which marks a significant decline from daily highs of nearly $200 that were set yesterday when bulls attempted to recapture its position above this level.
The massive selloff that occurred overnight first began when Bitcoin posted a decisive break below $7,700, with all of its buying support dissolving as it began descending to lows of $5,200.
The support BTC found at this level allowed it to bounce back to $6,000 – subsequently allowing Ethereum to also bounce from lows of roughly $125 to its current price levels.
This intense decline has also led to massive congestion on Ethereum’s network, resulting in a colossal spike in the median gas price.
Glassnode – an on-chain research firm – spoke about this phenomenon in a recent tweet, explaining that the price of gas is currently the highest it has been in over a year.
“Ethereum’s price drop has led to massive network congestion. ETH median gas price just spiked to 29 gwei – the highest it’s been in over 1 year,” they explained while pointing to the chart seen below.
#Ethereum's price drop has lead to massive network congestion. $ETH median gas price just spiked to 29 gwei – the highest it's been in over 1 year.https://t.co/RnoIRxrdkG pic.twitter.com/KpOEfpWGWe
— glassnode (@glassnode) March 12, 2020
ETH Hits a Do-or-Die Level as Bulls Show Signs of Weakness
In a recent tweet, Haejin – a cryptocurrency analysis platform – explained that the second largest cryptocurrency by market capitalization is on the cusp of breaking below a key multi-year trendline support level around $130.
“Ethereum….lower white trendline MUST hold or else…”
https://t.co/JhMTlE2zA1: Ethereum….lower white trendline MUST hold or else…. pic.twitter.com/W4iQWXISrl
— Haejin (@Haejin_Crypto) March 12, 2020
If Ethereum does decisively break below this level, it is possible that the cryptocurrency will see a massive bout of capitulation that leads it significantly lower in the days and weeks ahead.
Featured image from Shutterstock.