Ethereum approaches all-time high as whales buy and bitcoin thrives
The price of the ethereum cryptocurrency is on a tear, thanks to accumulation by whales and bitcoin’s jump.
- Ether (ETH) price surges to three-year high, past US$1,100
- This came after a weekend push helped by bitcoin’s bull run
- The altcoin could break its all-time record high of US$1,424
Ethereum price nears historic high
The world’s second-most heavily traded cryptocurrency rang in the new year with an explosive start.
Ether (ETH) traded at a three-year peak of US$1,103.36 at around 09:30 GMT+8 on Tuesday (05 January 2021), up 15.7% on the day.
This ‘came on great address activity for ETH and an encouragingly low ratio of tokens sitting on exchanges’, data analytics platform Santiment tweeted on Tuesday.
ETH is the cryptocurrency of the ethereum network, an open software platform built on blockchain technology. Its price gained a whopping 600% in 2020.
Before it shot past the US$1,000 mark, American bitcoin investor Cameron Winklevoss, who founded the Gemini cryptocurrency exchange, said last week that ETH was ‘easily the most underpriced’ cryptocurrency in the world.
In the derivatives space, open interest in ETH options hit a new high of US$1.1 billion, cryptocurrency futures and options exchange Deribit said on Monday.
The latest massive rally in ETH followed bitcoin’s monumental run to US$34,800 on Sunday, less than three weeks after the latter crossed US$20,000 for the first time.
The price of bitcoin, the world’s most popular cryptocurrency, quadrupled last year, as more traders and investors bet that it will become a mainstream payment method.
Most of the major ‘altcoins’ - other cryptocurrencies regarded as alternatives to bitcoin - tend to see their prices track bitcoin’s performance. Nimrod Lehavi, founder of crypto payments firm Simplex, has said traders are looking for ‘the next BTC’.
Positive sentiment lingers for ethereum
In a bullish sign, more ‘whales’ are accumulating ETH, although mid-tier holders are selling, according to data from Santiment. ‘Whales’ are investors with deep pockets who are large holders of certain cryptocurrencies.
On 31 December 2020, Santiment analysts wrote that there were 39 more ethereum addresses each holding over 10,000 tokens of ethereum compared to just two months ago, indicating that large buyers were taking bigger stakes in the cryptocurrency. Meanwhile, the number of addresses holding 1 to 10,000 ETH shrank over the same period.
The provision of extraordinary fiscal and monetary stimulus measures, in response to the Covid-19 pandemic, has also underpinned ethereum and bitcoin prices since their March 2020 lows, noted DailyFX analyst Daniel Moss.
However, the recent topside surges ‘appear somewhat overextended’ for both cryptocurrencies, even though their longer-term outlook remains ‘overly bullish’, Moss said on Monday. ‘This suggests a near-term pullback could be at hand.’
Ethereum breaching the psychological resistance of US$1,000 ‘could neutralise near-term selling pressure’ and carve a path for its price to challenge the record high of about US$1,424 in January 2018, Moss wrote.
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