ETH is the one in the limelight this week as the digital currency went even closer to its all-time high. Going as high as $1,389, as of writing, Ether is now just a few dollars away from its 2017 peak of $1,420 and going on a price discovery journey like Bitcoin that saw the leading cryptocurrency hitting $42,000.
“Bitcoin has been in a range for the past few weeks, which gives time for capital to rotate” into other digital assets, said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore.
#Ethereum will soon pass to the next level.
These are the levels to watch beyond all time highs: 1500, 1600, 1920, 2000, 2240, 2500, 2750. pic.twitter.com/suCZtt7Iv8
— Alex Krüger (@krugermacro) January 19, 2021
The imminent launch of Ethereum futures on the CME is expected to lead to competition for flow vs. Bitcoin as “the very same institutional investors that bought into the idea of Bitcoin may also contemplate an allocation to Ethereum,” noted Denis Vinokourov of Bequant.
According to Pantera Capital, who is “very bullish” on Eth and believes it is “undervalued,” this launch “legitimizes Ethereum as something institutional investors can own, and it’s actually a fairly easy bucket for them to allocate to.”
Meanwhile, this 15% uptrend in ETH prices has the funding rates on Ethereum perpetual futures going berserk. Longs are paying shorts some hefty differences between the price of the futures and the underlying asset.
Huobi and BitMEX see the highest funding rate at 0.65% and 0.50% on ETH perpetual futures, as per Viewbase.
Ether futures basis jumping to 25%+ annualised pic.twitter.com/2vcxIeKr3D
— skew (@skewdotcom) January 19, 2021
As we reported, this bullishness for Ethereum is to be expected while Bitcoin ranges between $30k and $40k. Moreover, the supply of ETH on exchanges continues to decline as people move it off the trading platforms in favor of HODLing in the hope of higher prices in the future.
Also, a lot of ETH supply is locked in DeFi (7 million), ETH 2.0 (2.57 million), and in Grayscael’s ETHE (2.93 million), all working in favor of bullish price momentum.
Amits this price action, the second-largest blockchain is seeing heightened use even more than the leading network Bitcoin.
This is to be expected given that Ethereum hosts the decentralized finance (DeFi) sector, which has been seeing growing usage, not to mention the decentralized exchanges (DEX) recording increasing volumes, a total of $10.4 million volume in the last 7 days. DeFi users have also grown to over 1 million.
Ethereum’s daily transaction volume is also going parabolic, which now settles $12 billion in transactions daily, $3 billion more than Bitcoin, as per data source Messari.
But so is the average traction fees, which today saw a small uptick to $7, still down from $20 on Jan 11, but if the ETH price continues to power on along with the DeFi tokens, another surge could still be seen in fees to climb to new levels.
Gas prices are already recording spikes throughout January, going as high as 260 Gwei earlier this month and are currently at 90 Gwei, but it is the average gas price. To get your transactions processed faster, it easily costs you over 100 Gwei.
The post ETH Ready for Bitcoin-like Price Discovery with New ATH; Blockchain Activity Goes Parabolic first appeared on BitcoinExchangeGuide.
