• Ethereum (ETH) price is down today as trading volume remains low and traders send Ether to centralized exchanges.
• Regulatory headwinds, such as the debate surrounding whether Ether should be classified as a security token in the U.S., have led to a lack of investor confidence.
• Total Value Locked (TVL) in the Ethereum ecosystem has dropped significantly due to liquidations and low trading volume.
Ethereum Price Drops Today
Ether (ETH) price is down on May 17, reaching a 7-day low of $1,788. Market analysts believe that this drop could lead to Ether staying below $1900 in the short term.
Reasons for Drop
The Ether sell-off ignited a wave of Ethereum leveraged liquidations, with 26,158 traders being liquidated to the tune of $56 million on May 17. Trading volume has decreased from its March 11 peak of $24.8 billion to only $1.9 billion as other protocols gain momentum. Additionally, regulatory headwinds such as the debate around classifying Ether as a security token in the US have led to a lack of investor confidence which has had an impact on ETH’s price movements.
US regulators are trending toward taking swift action on crypto assets and lawmakers in the UK are claiming that crypto assets should be regulated like gambling due to their high risk nature of investing . If Ethereum is deemed a security in the United States, centralized exchanges may be forced to delist it for US customers which could negatively impact altcoins, DApps and decentralized exchanges built on Ethereum.
Total Value Locked
Total Value Locked (TVL)in the Ethereum ecosystem has also plummeted due to liquidations and low trading volume caused by regulatory headwinds and other protocols gaining momentum. This decrease in TVL could have long lasting impacts on the future growth of Ethereum if investors do not regain confidence soon enough.
The current decline in Ether’s price highlights its volatility compared with other cryptocurrencies such as Bitcoin which lost its key $27000 support level on May 17th leading some analysts believing it will fall further still towards $25000 . The future trajectory depends largely upon how quickly investors regain trust and confidence within market conditions currently facing increased regulatory scrutiny across several global jurisdictions .