ETH sank to as low as $1,523, its weakest price since March, CoinDesk data shows. It’s since bounced back to $1,531 but remains down 1.9% over the past 24 hours, underperforming the broader crypto market-proxy CoinDesk Market Index’s (CMI) 0.5% decline.
Bitcoin (BTC), meanwhile, was off only modestly to $26,600 outperforming most of the rest of the digital asset market.
Solana (SOL), toncoin (TON) and Avalanche’s native token (AVAX) declined 2%-3% Thursday.
Tokens tied to the decentralized finance (DeFi) suffered the most among digital asset sectors amid continued tepid DeFi activity, with the CoinDesk DeFi Index (DCF) down nearly 2%.
In traditional markets, U.S. stocks broke their four-day winning streak. The S&P 500 and Nasdaq each slipped 0.6% alongside sharply higher bond yields as the U.S. Consumer Price Index (CPI) – a closely-watched measure for inflation – rose 0.4% in September versus the 0.3% analysts expected.
The U.S. Dollar index (DXY) also climbed 0.8%, adding to the pressure on riskier assets such as equities and crypto.
Investment advisory firm ByteTree recommended investors to cut ether’s weight in portfolios as the crypto continues to struggle.
“ETH is a fabulous long-term project but, at the same time, is losing its spark as an investment,” ByteTree analysts wrote in a market report earlier this week. They cited reasons such as lower network revenues from fees, diminishing amount of tokens burned – which flipped ETH to inflationary – and gradual decline of staking yield.
“All these combined factors impose bearish pressure on ETH, and given the continued underperformance, we believe it is prudent to reduce exposure,” ByteTree analysts said.
One reason for BTC’s outperformance while other cryptocurrencies struggle could be that investors flock to its relative safety during uncertain periods, according to Dan O’Prey, chief product officer of Bakkt.
“Bitcoin, being the most decentralized and secure asset, has also benefited from flows from the riskier, long-tail coins,” O’Prey said in an email.
Bitcoin’s share of the crypto market – also known as Bitcoin Dominance – now is approaching a two-year high level, crypto exchange Coinbase’s analyst noted in a Thursday market report.
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- Source: https://cryptoinfonet.com/bitcoin-news/ether-drops-1-9-to-7-month-low-as-crypto-buckles-further-following-inflation-data/
