Ethereum Nears $3000 Mark, Major Surge Explained
Date: 2024-02-20 Author: Dima Zakharov Categories: BLOCKCHAIN
ETH Price Surpasses $2900:
Ethereum, the second-largest cryptocurrency by market capitalization, has surged past the $2900 mark for the first time since May 2022, marking a weekly growth of 10.36%. Meanwhile, Bitcoin, the flagship cryptocurrency, saw a modest increase of only 3.82% during the same period.
Factors Driving the Surge:
Several factors contribute to the sharp rise in ETH value. Firstly, an upgrade known as Dencun is anticipated in March 2024, promising enhancements to the blockchain, including the implementation of EIP-4844 proposal aimed at reducing transaction fees, particularly in Layer 2 solutions like Arbitrum, Optimism, and Starknet. Secondly, speculative expectations regarding the potential approval of a spot exchange-traded fund (ETF) for Ethereum in May are fueling market sentiments.
Large Investor Activity:
According to SpotOnChain analytics, an unidentified investor acquired 22,719 ETH worth $65.7 million via Binance and 1inch, bringing their total holdings to 54,721 coins valued at $155 million. This significant investment indicates optimism among major investors regarding further price appreciation.
Caution Amidst Futures Market Indicators:
Despite the bullish trend, experts warn of overheating in the futures market, as indicated by the open interest in perpetual contracts. This metric tracks the total value of futures contracts currently open across all centralized cryptocurrency exchanges. A notable increase in this indicator suggests imminent high volatility in the digital asset. Traders are advised to exercise caution, considering the possibility of liquidations that could trigger significant short and medium-term price declines for Ethereum.
As of February 20, 2024, Ethereum is trading at approximately $2930, with a market capitalization of $352 billion and a trading volume of $15 billion.
