The long wait is finally over. Ethereum managed to breach its all-time high and is now officially in price discovery territory. This happens as the cryptocurrency charts weekly gains upwards of 30%.
Ethereum Breaks ATH
At this point, it doesn’t seem to be much of a surprise that ETH broke its ATH. After all, its price has been surging consistently in the past few months and especially since the beginning of 2021.
Looking at the charts, ETH’s growth is nothing short of impressive. On January 1st, the cryptocurrency opened up with a price of around $740, meaning that it has almost doubled up in value, charting a staggering increase of 93%.
Of course, the milestone didn’t come without some serious selloffs and road bumps along the way. On January 10th and 11th, the cryptocurrency went on to decline from a high of $1352 to a low of $937 – a decrease worth around 30%. Those who managed to hold tight to their coins, however, were handsomely rewarded as the cryptocurrency has since increased to its current all-time high values.
What Caused ETH’s Surge?
There are plenty of reasons for which Ethereum is on the rise, and the momentum seems likely to continue in 2021. Number one, and perhaps the most important reason of all, is the field of decentralized finance.
DeFi is booming. The total value locked in various protocols is around $25 billion – an increase of about 4500% since April last year. But that’s just the tip of the iceberg. We saw the creation of a vibrant ecosystem with thousands of protocols with their own native cryptocurrencies. The wide majority of them run on Ethereum’s network, driving the demand for ETH through the roof. This has also highlighted some of the blockchain’s problems, however, as transaction fees have become so high that many have claimed that DeFi is only worthwhile for larger investors.
This brings us to point number two – Ethereum 2.0 – the solution to the sky-high fees and the clogged network. With Ethereum 2.0, the network will migrate to a Proof of Stake (PoS) consensus algorithm and Phase 0 went officially live in December. This marked a big milestone, and even though it could be a couple more years until the launch of the improved network, it surely played a part in the price for ETH.
Meanwhile, users can already stake their ETH tokens to support ETH 2.0, and here are some of the best exchanges to do so.
The overall bullish sentiment in the market is also notable. The entire cryptocurrency market went on a tear, crossing the $1 trillion mark for the first time in history a week ago.
What’s Next for ETH’s Price?
As mentioned above, ETH is now in price discovery. This generally means that we have no previous entry points to draw a comparison from.
However, notable crypto trader Alex Krüger took it to Twitter to reveal that judging by ETH options’ open interest, most strikes above all time highs are set at key fib levels.” With this, he outlined $1500, $1600, $1920, $2000, $2240, $2500, and $2750 as potential targets.