Ethereum Founder Warns About Over-Investing Dangers, ETH Shorts are Soaring in Numbers


Honesty is always good. But it is also disconcerting when the founder of Ethereum is advising people to be prepared for massive price drops.

After the heady days in January this year when the prices soarded to a touch under $1150, today they have regressed to just over $90. This genearl disctruction has caused the fearful market to hedge its bets and prepare for more instability. Due to the defensive posturing, ETH shorts have now reached an all-time high.

ETH being shunned everywhere.

As crypto assets trading firm, Cumberland updated,

“Historically, our trading volumes have been more evenly weighted across BTC and ETH. However, our recent flows have been heavily skewed towards BTC – with approximately 70% of our transactions in BTC.”

While ETH had lost ground like all cryptos these past few months, it was still hovering around $110, earlier this week. Then the prices crashed late night on the 6th. This only stopped when the prices bottomed out at $82. This historical low has made some recovery at the time of press.

The worlds 3rd largest crypto has a total market capitalization of $9.5 billion and has been steady in the mid $90 band. In the last 24-hour trade cycle the prices have stayed around at $93 with an overall gain of slightly over 5%. Despite this, a general trend of low and slow trading has been observed.

Course correction or doomed venture

It has naturally caused many to move away from trading in ETH at this point.

Such a fall from grace has not discouraged the coin; in fact, they have recently announced its long-awaited hard fork Constantinople; expected early next year. Péter Szilágyi has noted this by posting online

“#Ethereum Constantinople mainnet hard fork scheduled for block #7080000, estimated around the 16th of January, 2019!”

This hard fork has been seen by many as the shot in the arm needed to help the fading currency. It is supposed to involve the five Ethereum Improvement Proposals (EIPs) that are going to “fundamentally change the Ethereum blockchain,” and help its prices to bounce back. This is to directly counter the growing competition from new players like Tron. Just last week Justin Sun the founder and CEO of Tron was trying to rally devs to migrate to his network.

This multi-front battle for ETH is set to get worse as the popular trader and investor, Crypto Squeeze tweeted,

” Found the reason of the $ETH bounce 7 hours ago. Hardfork date was announced 11 hours ago. Not a coincidence. And that $ETH bounce might have drove the $BTC price up too. I still don't think this is the actual long term bottom for both $BTC and $ETH yet.Too early to tell”

Days of future and warnings of the past

While Vitalik is trying to fight back, continuously going back and forth with Justin Sun; it does seem that the market is now pessimistic about its chances.

In a clear indication of intent from investors and traders, ETH shorts have now reached an all-time high with a sharp jump, this week. This steep climb of shorts clearly shows that the market sentiments are expectant of a coming price drop.

The Ethereum founder, Vitalik Buterin had warned people at the start of the year saying:

Reminder: cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time. Don’t put in more money than you can afford to lose. If you’re trying to figure out where to store your life savings, traditional assets are still your safest bet.” I now seems that prophesy has come back to haunt his company. Whether this actually sinks one of the most powerful cryptocurrencies or this is the nadir from which it shall raise and shine again, remains to be seen.

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