Ethereum’s price has halved in the past 30 days, falling from a brief all-time high of $420 to now stand below $200, sending many investors under.

The currency has experienced a spring the likes of which we have never seen before, considering its scale and time-frame, rising from around $5, reaching new highs daily.

It likely dragged all other digital currencies up with it, at some point nearly overtaking bitcoin’s market cap, but as with any psychological barrier, traders started front-running before it could do so.

When the $400 price level was reached, sentiment was fragile and jittery. People expected a correction, but no one knew when it would happen. Then, the first sell-off ensued.

It was brutal. Down to $248 in minutes as everyone rushed to get out thinking this was it, at least for now, but the bull sentiment was far too strong, with price nearly instantly up to $370.

In hindsight, we can reasonably say the first sell-off was caused by the infrastructure being unable to keep up. Exchanges, like GDAX and Kraken, simply could not process the demand, leading to considerable backlogs in deposits. Status led to a backlog of ethereum transactions. There were concerns ethereum was growing too fast with development unable to keep up.

Bears exploited that weakness in the first sell-off, with the atmosphere somewhat changing after all the bubble charts were posted everywhere, but denial was strong.

Until GDAX crumbled again in a flash crash that sent ethereum’s price down to ten cent for a very brief period, with price then roller-coasting between $200 and $330, sort of settling on the later.

Until Mega ICOs raised a million eth or more in 19 days, turning traders bearish in anticipation of them cashing out with some evidence they have indeed been doing so in open exchanges. Leading to a downtrend.

That’s the story so far and, with some superficial differences, it looks very much similar to March 2013. Back then, bitcoin too had risen from around $10 to a brief high of $266, making new highs daily, with many calling it a bubble.

Around $250, mood back then was jittery. Everyone sort of expected a correction, but no one knew when. Someone exploited that expectation, DDoS-ing Mt Gox, then the biggest bitcoin exchange by far.

Everyone panicked. The sell-off was the most brutal in this space. Down to around $70 in minutes, a very brief recovery to around $140, then a months long sideways at around $50-$70, until the currency took off once again in November 2013 in a spectacular rise to $1,000.

The similarities extend a bit further as March 2013 was the second time bitcoin had risen, with the first time being in 2011 when it went from pennies to a high of around $30, then instantly crashing because of a black swan event as MT Gox was hacked.

That’s very similar to the story of ethereum during spring 2016 when it rose from pennies to around $25, then crashed down due to the Slockit DAO hack.

It took bitcoin two years to recover from its 2011 hack because back then whether bitcoin works at all was very much in question.

For ethereum, the 2016 downtrend lasted about five months, from September to February, with the currency then taking off earlier this year not much different than bitcoin did in 2013.

The two latter crashes, in 2013 and now in 2017, did not occur because of any real external event, because of any change in facts, or really for much of any reason at all, except that they had risen too high, too fast, and the market thought they had done so, expecting them to go down, with any excuse ready to be grabbed.

Mania had simply taken hold, forcing reality to exert itself and bring everyone down to earth because everyone had been partying too hard, drinking too much and the music was too loud.

This isn’t a phenomena unique to digital currencies. Countries boom and bust, stock markets crash, but in this space it all happens a lot faster.

Because it is all so very new and there is so much happening that you’re never sure whether $200 is incredibly cheap or very expensive, leading to considerable swings.

Moreover, uniquely in this space, everyone can take part. Stocks have to go through brokers and the rest. Eth, you just buy like you’d buy some bread.

Which means in this space we have the full crowd, rather than just investment bankers playing in their skyscrapers at Wall Street or Canary Wharf.

So they yo-yo in sentiment, thinking $5 is expensive in February 2017, $400 is cheap in June 2017, while being unsure about $200 in July, so waiting for the market to go up or down.

But if ethereum continues to follow bitcoin’s trajectory, when it roars again it may do so in a way we have never seen before because its bull runs have been longer than bitcoin’s, its downtrends far shorter, its price gains a lot higher.

That is likely to be because ethereum is an upgrade of bitcoin. The later does what was interesting a decade ago – money transfers worldwide. Ethereum does that, but it also does what is very interesting right now – codable money.

That’s something this space has been expecting at least since 2013. It is now here and at a global scale with nearly all household brands and main world governments exploring its use one way or another.

Whether their explorations will amount to anything remains to be seen, although pilots are already underway. Likewise, how ethereum projects will progress is not very clear, but a good guess would be most of them will go under while some may develop into giants.

In that context, the current price movements seem temporary, both the very highs and the very lows. Interesting for what they tell us regarding current developments, acting, in the process, as a very useful feedback mechanism.

We need to listen to that feedback and take action in response, with Brian Armstrong, CEO of GDAX, stating they have indeed done so:

“Scaling efforts finally paying off. Like an iceberg, 99% of the work hidden beneath the surface.”

Moreover, ICOs need to be capped, unless they have a considerable number of users or revenue, with the ecosystem likely responding to the current punishment by the market.

In the process, through feedback, the platform is strengthened, incrementally and gradually improving, making it more appealing, leading to more utility, which may then lead to another round of euphoric boom and bust.

But we have to wait and see whether that will indeed be the case to be sure, because although the past rhymes, you can’t really predict the future with any level of certainty.