Ethereum price soared to an all-time high of $1,922 as investors continued to pile-into cryptocurrencies. ETH price has already jumped by more than 2,000% from its lowest level in 2020. This surge has brought its market cap to more than $217 billion. On the other hand, Ethereum Classic price has risen by just 300%, bringing its market cap to $1.79 billion.
What happened: Ethereum price has jumped by 160% this year helped by three main factors. First, the ETH 2.0 upgrade that started last year is ongoing and analysts believe that it will improve the network. It will achieve this by shifting from proof-of-work (POW) to proof-of-stake (POS) and help it build an edge against other fast-rising alternatives like Solana.
Second, ETH price has risen because of the rising adoption of Decentralized Finance (DeFi). In less than two years, the total value locked in DeFi has risen from less than $1 billion to today’s $42 billion. This is important since most DeFi projects are built on Ethereum.
Third, with Ethereum trading at less than $2,000, many investors view it as a good alternative to Bitcoin. This is especially true among retail traders.
Fourth, the price has risen because of the recent decision by CME to launch futures. This allows more institutions to invest – and short – the currency. Finally, and most importantly, the ongoing fiscal and monetary policy in the United States has incentivised a rush to risky assets by most investors. In fact, Ethereum price could continue rising if Congress passes the upcoming $1.9 trillion package.
In my last prediction, I wrote that the ETH could rally to $2,000 soon.
The daily chart shows that the ETH price has been on a steady uptrend in the past few months. The price remains above all moving averages while other indicators like accumulation and distribution show that there are still buyers in the market. Therefore, in the near term, I suspect that the price will continue rising. In fact, we should not rule out another rally to $2,500 ahead of the new stimulus package.
Source: Investing Cube
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