The price of Ethereum has risen 96% in the last 53 days from $ 116 to $ 228. Traders anticipate ETH to become one of the top performing coins in 2020 if the current boom turns into a full-scale rally.
Throughout the past month, Ethereum has led the market. Before Bitcoin price started running to $ 10,000, ETH continued to demonstrate a vertical bull run with every dip purchased at breakneck speed.
Trader Satoshi Flipper said that as the volume of cryptocurrency assets increases with the price, it often indicates a short to medium-term trend.
“The volume, spot and derivatives of Ethereum are all really great.”
Other prominent technical analysts have also focused on Ethereum during the recent rally, adding that ETH is likely to outperform the rest of the market.
In addition to the fundamentals, Ethereum has broken out of the multi-year resistance zone at $ 210. It has surpassed a significant region in terms of transaction rates much faster than Bitcoin.
When Ethereum showed a sign of a parabolic rally for the first time since May 2019, it caused FOMO in the market and spurred greater demand. Another reason for stronger performance than other cryptocurrencies is its price trend since 2017.
Since a record high of $ 1,400, Ethereum price has dropped by over 90% until last month. Even after nearly doubling in price, it is still down 84% from the ATH level.
When an asset is oversold, breaking a multi-year downtrend often creates a major reaction from the market. More importantly, large altcoins like Ethereum have been shortened a lot in the last months of 2019.
Many large short squeezes further fueled the explosion of Ethereum, as Satoshi Flipper stated:
“Traders in 2018, who only trade in the bear market, will have a challenging trading period in this bull market. They are simply one-way transactions (largely thanks to the paid college curriculum they have studied) and I have seen how stubborn some of them are. ”
The data indicates that interest in Ethereum is increasing day by day. Skew researchers said the total open interest for ETH was $ 600 million, the highest level in six months.
OI for futures deals refers to the total number of long and short contracts opened on the market at a given time. It shows that many traders are trading ETH after its rally.
The fundamentals are backing the Ethereum rally
Given the explosive growth of decentralized finance (DeFi), there are not many factors that can justify high market valuations for Ethereum.
Decentralized applications (DApps) have shown a lackluster number and user activity, with scalability on the Ethereum blockchain network struggling.
In February 2020, the total amount of DeFi related money atop Ethereum surpassed $ 1 billion, opening ETH for a real-world use case to apply.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.