Ethereum ($ETH) has been a recipient of bullish pressure, climbing above the key $3,000 price level for the second time in the month of February.
This price surge can be attributed to significant activities by large stakeholders. Notable movements include the withdrawal and staking of substantial amounts of $ETH from exchanges, indicating a shift towards long-term holding.
Additionally, Ethereum has been the subject of significant transactions, including those linked to high-profile individuals like Justin Sun. These activities, combined with Ethereum’s increasing utility and market presence, have led to a nearly 35% price increase over the past month.
What is Ethereum?
After launching in 2015 by Vitalik Buterin and various other co-founders, Ethereum has emerged as a key player in the cryptocurrency market. Ethereum quickly distinguished itself from its predecessors. Unlike Bitcoin, which was primarily seen as a store of value, Ethereum was designed with utility at its core. Developers were able to create applications and their own layer 2 networks by using the Ethereum blockchain.
Ethereum was initially founded with the proof of work (POW) model, which meant cryptocurrency miners created new blocks on the network. However, in 2022, it moved to a proof of stake model (POS), where new blocks are created by validators staking the native cryptocurrency.
How Ethereum changed the crypto landscape?
Ethereum’s introduction of smart contracts was a game-changer in the cryptocurrency world. These contracts execute automatically when certain conditions are met, without the need for intermediaries. This innovation paved the way for decentralised applications (dApps), including decentralised finance (DeFi) and non-fungible tokens (NFTs), expanding the use of blockchain technology beyond simple monetary transactions.
When it comes to DeFi, it is the largest chain, according to DeFiLlama. At the time of writing, there are $26.1billion worth of assets locked into applications on the blockchain, making up roughly 55% of the entire DeFi market.
The top three protocols on Ethereum in order of total value locked (TVL) are the staking app Lido, the decentralised autonomous organisation (DAO) platform Maker, and the lending protocol Aave.
Ethereum also pioneered the concept of tokens, giving developers a much easier route to launch their own cryptocurrency. Developers are able to utilise the ERC-20 standard to create their token. Some of the biggest ERC-20 tokens include Chainlink and Polygon.
The ETH cryptocurrency
Meanwhile, the blockchain’s native cryptocurrency Ether has become a significant asset in the cryptocurrency market. It’s a popular choice for investors, second only to Bitcoin in terms of market capitalisation.
It is not just a medium of exchange. It’s a utility token that powers the Ethereum network, used as a currency for transaction fees called gas. This fee is then paid to validators to incentivise them to continue securing the network.
Ethereum price history
As the second largest cryptocurrency, Ethereum’s price is often indicative of the wider market. $ETH usually takes price hits during market crashes, while making gains during bull runs.
The cryptocurrency started off via an Initial Coin Offering in 2014, where it raised $18.3m worth of Bitcoin. Over 60 million Ether sold at a price of $0.311 per cryptocurrency.
$ETH then launched in August 2015, going live at $2.79, according to CoinMarketCap. It made steady gains over its first couple of years of trading, climbing to the $10 mark by the beginning of 2017.
The bull run of 2018 saw the cryptocurrency reach its first significant price record of $1,365 on 15 January.
Despite some peaks and troughs, Ether settled between the $100 and $300 mark over the following years.
It next saw huge success in 2021 with the wider market. It rocketed back to the $1,300 level at the end of January and continued its upward trajectory across the year. It hit $3,924 on 10 May.
Ethereum then climbed to its all-time high of $4,891 on 16 November 2021.
Like most cryptocurrencies, it couldn’t keep up the 2021 highs and felt the impact of the crypto winter that followed.
During the crypto crash of June 2022, it dropped back to the $1,000 level. Despite moving to a POS model later that year, it struggled to see much price action.
More recently, Ethereum has gone on its own bullish trend. In doing so, it reclaimed $3,000 for the second time this month after residing below this threshold for several days.
$ETH is currently changing hands for $3,047, up by almost 5% weekly. It has now reached a 22-month high of $3,125, which is the highest price the asset has seen since April 2022.
Its main rival Bitcoin, on the other hand, was trading in the red on its chart as Ethereum was seen on the green side. $BTC is down by almost 2%, risking a drop below its key $50K price level at press time.
What’s keeping ETH up on the charts?
One of the primary drivers behind Ethereum’s recent price surge is the notable activity of large-scale investors, also known as “whales”. These investors have been moving significant quantities of Ethereum off centralised exchanges and into private wallets.
For instance, the withdrawal and subsequent staking of 14,632 $ETH by a single whale wallet from Binance signified a shift towards long-term holding strategies.
Such movements reduce the available supply of Ethereum on exchanges, thereby limiting the potential for large-scale sell-offs. This further contributes to an upward pressure on prices.
A particularly intriguing development has also been the involvement of the founder of Tron, Justin Sun. Reports and on-chain data have highlighted significant Ethereum transactions linked to wallets that are believed to be associated with Sun.
A wallet believed to be connected to Justin Sun has been reported to make substantial purchases of 13,780 $ETH, valued at approximately $41.24 million, from cryptocurrency exchange Binance within the last 12 hours.
Additionally, the strategic accumulation of Ethereum by new and existing wallets, particularly over weekends, suggests a growing confidence among investors in Ethereum’s long-term value proposition.
This is further evidenced by the withdrawal of 6,000 $ETH from Kraken, pointing towards a trend of decentralisation and self-custody among Ethereum holders.
These actions, coupled with reduced selling pressure, foster a bullish market sentiment, propelling Ethereum’s value upwards.
Ethereum price prediction
The market’s response to these activities is reflected in Ethereum’s price trajectory, which has seen a remarkable rise of nearly 35% over the past month.
Looking ahead, Ethereum’s market outlook appears promising, buoyed by both technical advancements and evolving market dynamics.
Market analysts, such as Jacob Canfield, have observed Ethereum’s ability to flip support and resistance levels multiple times, indicating a strong bullish momentum.
The cryptocurrency is now targeting the $3,350 level, with further gains expected as the market approaches the deadline for the spot Ethereum ETF.
This event is particularly significant as it could lead to increased institutional adoption and investment in Ethereum, further driving up its price.
Moreover, Ethereum’s performance relative to Bitcoin is another critical factor to watch. The ETH/BTC ratio is approaching a pivotal point, suggesting that Ethereum could gain ground against Bitcoin.
A break above the weekly supertrend for this ratio would signal a significant shift in market preference, potentially leading to a new era of ‘altcoin dominance,’ with Ethereum at the forefront.
The potential for Ethereum to achieve a historic monthly close above the $2,791 level in a bull market, as noted by analyst ‘Rekt Capital,’ further underscored the positive sentiment surrounding Ethereum.
The atlcoin’s technical indicators also emanated bullish signals. Both its Awesome Oscillator (AO) and the Moving Average Convergence/Divergence (MACD) were seen with green histograms on their respective charts.
Investors and market watchers remain optimistic, with some projecting that Ethereum could reach unprecedented highs in the coming bull cycle, potentially surpassing the $10,000 mark.
However, as with all investments, caution and due diligence are advised, given the volatile nature of the cryptocurrency market. Traders should remain wary of high price volaitly as the Bollinger Bands were seen widening and moving away from each other at press time.
FAQs
Should I invest in Ethereum?
Current Ethereum price forecasts are optimistic, with several major banks predicting a robust upward trend in the future. However, it’s important to remember that the cryptocurrency market is known for its significant fluctuations. Always ensure to invest only what you are financially comfortable with losing.
Is Ethereum a good investment?
Ethereum is the second largest cryptocurrency and was designed with utility in mind. It can be used to pay for transaction fees for the bustling crypto network. Investors should be cautious and always conduct thorough due diligence.
Disclaimer: The information provided in this article is for informational and educational purposes only and should not be construed as financial advice. CoinNews and its authors are not financial advisors or experts. We recommend that you consult a professional financial advisor or conduct thorough research before making any investment decisions. Cryptocurrency investments carry a high degree of risk, and you should only invest an amount you are willing to lose. The opinions expressed in this article are those of the author and do not necessarily reflect the views of CoinNews or its affiliates.
