- Ethereum reached $1.163 after an intensive 80% per week growth rally.
- Exchange flows data indicates a tendency to hold ETH coins.
Ethereum (ETH) broke through a $1,000 mark after the impressive bull rally this weekend. The world’s second-largest digital asset tested the highs of $1,163 early on Monday. The last time this high ETH was in January 2018.
Double-digit bull rally
Ethereum rocketed up by nearly 50% on Sunday, January 3, climbing up by more than $380 on various trading platforms. The past week was one of the best for Ethereum as the coin spurted from the $634 mark on 27 December and increased more than 80% till today.
During the last 12 months, the coin climbed over 600%, accounting for over $110 billion in market capitalization at the time of publishing.
What’s behind the massive uptrend?
Ethereum spurted moments after Bitcoin tested the new all-time highs of $34,605 and began to retract earlier on Sunday. Historically, Bitcoin’s bull run is supposed to inspire the altcoins rally, primarily led by Ethereum.
This is a standard movement in cryptocurrency markets, Vijay Ayyar from Luno cryptocurrency exchange told Bloomberg. According to him, this comes as a result of capital shift on other well-performing assets:
This rotation happens usually when Bitcoin has a large rally and investors rotate profits into other digital coins.
At the same time, institutional interest in Ethereum is growing significantly. Grayscale Ethereum Trust hit its milestone $2 billion mark of assets under management (AUM) before New Year’s Eve. The first publicly-quoted ETH investment product in the US doubled since the start of November, representing fast-growing institutional investments in Ethereum.
The institutional investments on ETH are expected to grow, as the world’s leading derivatives marketplace Chicago Mercantile Exchange (CME) announced the launch of Ethereum futures contracts from February 8.
Accordingly, as Glassnode data analytics reports, Ethereum funding rates already are at record highs. These rates are part of futures contracts traded across various crypto exchanges
On the flip side
- The hashrate of the Ethereum network increased to the all-time high of 306.3 TH/s on January 3.
- The average Ethereum transaction fee increased to the highs of $10.2 today, YCharts reports.
What’s next for ETH price?
After reaching the three-year high, Ethereum dropped to nearly 20% on Binance today, approaching the support line of $920. It bounced back to over $1.020 in a few hours and trades at around $1,045 at the time of publishing. This is still 27% lower than its all-time high of $1,433.
However, the data of exchange flows from CryptoQuant reveal the growing tendency to withdraw ETHs from the trading platforms, suggesting investors are here to hold instead of trading.
