Ethereum Rally Continues Amid Bitcoin Surge and Anticipation of Dencun Upgrade
Summary:
Ether (ETH) has seen a 3% rise in the last 24 hours, trading at approximately $3,480. This increase mirrors Bitcoin's (BTC) 21% surge in the past week. This momentum is attributed to Bitcoin's rise to a 27-month high, a boost in funding rates, amplified buying in the US, and the anticipated Dencun upgrade. The Dencun upgrade, set to launch on March 13, aims to lower transaction fees and improve the Ethereum network's scalability. The surge in ETH demand from Coinbase reflects a positive trend, suggesting a continued rise for Ethereum in the coming weeks.
In the last 24 hours, Ether (ETH) has seen a rise of 3%, now trading at around $3,480. In the past week, its value has boosted by 16%, closely following Bitcoin's (BTC) 21% surge within the same timeframe. The bullish momentum for Ether can be tied to Bitcoin's whopping 27-month high of $57,000, a surge in funding rates, increased buying activities in the US and the much-anticipated Dencun upgrade.
The surge in Ether's value is primarily driven by purchases in the United States, particularly on the Coinbase exchange. Bitcoin's climb to $64,000 on 28th February was powered by a notable rise in institutional buying as Bitcoin ETFs marked their highest ever inflows since their launch earlier this year in the amount of $676 million. Consequently, there was also a hike in the price of ETH that surpassed the $3,500 level, peaking at $3,521 during the day. Bitcoin's correlation with Ethereum remains high, at 0.92.
CryptoQuant, a company providing analytics for cryptocurrency exchanges, reveals a marked surge in ETH demand from Coinbase, leading to what’s termed a "Coinbase premium". This measures the price variance between ETH/USD pairs on Coinbase and other exchanges thus indicating whether a specific Ether is trading at a premium or discount on Coinbase compared to other platforms.
Data suggests the Coinbase Premium Index is now in the positive territory, indicating considerable price volatility as of 28th February. This could signal a continued upward trajectory for Ethereum in the coming weeks, since the index has previously flagged price surges.
On a similar vein, information from Coinglass, a derivatives market monitoring firm, indicates a discernible spike in ETH funding rates on 28th February, reaching as much as 0.0668% in just eight hours, levels not seen since April 2021. This remarkable rise in funding rates reveals traders are extremely optimistic with investors displaying an increased propensity for high-risk bets.
This over-enthusiasm among investors can be problematic, as it leaves them vulnerable to a potential market correction, resulting in significant losses if the market trajectory changes, possibly leading to a marked drop in prices.
The impending Dencun upgrade, set for March 13, may also contribute to Ether’s price escalation. One of the key objectives of this upgrade is to cut transaction fees and enhance the Ethereum network's scalability, introducing the idea of proto-dank sharding to achieve this.
The Dencun upgrade has passed all its testing stages and is poised for activation on the mainnet, further engendering anticipation among ETH holders as its price trend continues to climb. It's important to note, however, that any investment or trading strategy comes with its own set of risks and investors are urged to carry out thorough research prior to decision making. The content of this news piece does not serve as investment advice or recommendations.
Published At
2/29/2024 9:40:31 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.