Ethereum plummets 6% after bitcoin falls overnight: what's causing the drop?

The Ethereum price has dropped by nearly six percent within a 12-hour span following Bitcoin's overnight three percent slip from $8,200 to $7,960.

Across major cryptocurrency exchanges like BitMEX, Binance, and Coinbase, the price of Ethereum slipped from $173 to $163, recording a large drop following the daily close.

The sharp pullback of Ethereum is likely to have been triggered by a minor drop of Bitcoin, which was seemingly demonstrating signs of a trend reversal to the upside as it surged past $8,300.

The daily trading volume of both Bitcoin and Ethereum are hovering around yearly lows on BitMEX, which is known to have a major effect on the price trend of the cryptocurrency market due to its futures contracts.

Usually, when Bitcoin shows a sideways movement during an extended period, the Ethereum price tends to show a spike in volatility.

Throughout October, the price of Bitcoin has remained relatively stable in a tight range between $7,800 to $8,300, creating an ideal environment for Ethereum and other major cryptocurrencies in general to see higher volatility.

The Ethereum price struggled to show signs of a breakout to the upside and its low volume intensified the downward movement, ultimately leaving the asset vulnerable to a short term pullback.

Previously, as CryptoSlate reported, technical analysts including Dave the Wave said that the Ethereum price is likely to correct all the way down to below $150 if the bitcoin price makes its way to the low $7,000 region.

Case of medium-term optimism for ETH. According to a price action trader, Ethereum is lacking signs of being overpriced or overbought and is in a neutral zone.

As Ethereum 2.0 comes closer, investors anticipate that it would alleviate some of the pressure on the price of the asset.