Ethereum breaks $400, then collapses like a wedding cake left in the rain

The recent Ethereum pump continued though Saturday night California time, when ETH briefly broke the $400 barrier, continuing the cryptocurrency’s immense gains. Then  at around 9:15 PM PST, it plunged like a World War 11 dive bomber, crashing from $413 to $359 in less than a half-hour.

The evening began on a bouyant note, with the price of Eth climbing to giddy heights. Ethereum hasn’t traded at $400 since early August 2018. The Saturday night benchmark came following a 14.1 percent increase over the previous 24 hours, with ETH rising from $351.19 before ultimately peaking at $413. As of this writing, at 1054 PM PST, the price had stabilized somewhat at $$374, according to CoinGecko.

On Friday, Ethereum broke the $340 mark for the first time since July 2019, and on Saturday reached a market capitalization of $40 billion—the first time since August 2018.

The day started out like a pretty good birthday present for Ethereum, which marked the five-year anniversary of its mainnet launch on July 30. 

Still, it’s the future of Ethereum that appears to be fueling its recent price growth. The rise of decentralized finance (DeFi) is a key contributor, with over $4 billion being locked up in DeFi apps and limiting the trading supply. On Friday, the DeFi market cap hit $8 billion for the first time.

Also, the release of Ethereum 2.0 is just around the corner, with the cryptocurrency switching from the current proof-of-work model to proof-of-stake, as well as utilizing sharding techniques to speed up transactions on the blockchain.

Breaking the $400 barrier represents a dramatic turnaround for Ethereum, which hovered around the $110 mark in March following the “Black Thursday” market crash as a result of the COVID-19 pandemic reaching the West.