The price of ETH continues to slide amid increasing negative press. Last week, a detailed piece by TechCrunch said that ETH could be worthless because app developers using the network could continue to use it without paying the Ethereum Gas. In response, the founder of the Ethereum Network, Vitalik Buterin said that the assessment was right and that the network needed to change.
At the core of the current decline is the fading interest in Initial Coin Offerings (ICOs). Over the past two years, entrepreneurs have raised billions of dollars through ICOs. Most of these projects were either half-baked or outright scams. This led to the suspension of ICOs in a number of countries like South Korea and China.
ICOs were created as an alternative to Initial Public Offerings (IPOs). An IPO is a process through which a company lists its stock to the public market. It is a highly regulated industry with agencies like the SEC and ESMA being keen to avoid scams. Listing a company to the public market is very difficult. For example, in the US, a company needs investment bankers and documents to show its performance. ICOS aimed to bypass this step in a bid to protect investors. Therefore, anyone from any country was able to create a website, write a whitepaper and market a project. Many projects were paid using Ether, however, multiple failures led to a decline in the price of ETH.
The ETH/USD pair is trading at 167, which is lower than the YTD high of 1366, which was reached in January. The price is below all the major moving averages while the RSI is below the oversold territory of 30. Conventional wisdom recommends that you buy at this oversold territory. However, with no positive news in sight, the pair could continue falling further.
