Morgan Stanley Says Ether Underperformance Echoes Crypto Downturn of 2018

While ether’s price cycle in U.S. dollar terms is similar to 2018, the analysts noted that this time round it’s largely institutional investors driving sales. In 2018, the share of retail trading activity was much higher.

The crypto-equivalent of quantitative tightening has continued, the bank said, fueling BTC’s slide to below $28,000, an important technical level. Any investors who bought BTC in the last year are now at a loss, and there are no obvious technical levels to watch until about $19,500, the 2017 high, it added.

For stablecoins “issuance is contracting quickly,” the report said, and this has contributed to leverage halving within the “decentralised crypto ecosystem” since the beginning of May, and the destabilizing of crypto derivative prices as they diverge from their underlying assets.