On December 4th, ETH reached $1,150. Ethereum has not reached this price point since 2018. However, despite the more than 400% rise during last year, ETH is still down almost 45% from its all-time high price of $1,433 observed in January 2017.
Ether followed the momentum of Bitcoin. Historically, other cryptocurrencies have mostly seen upside gains following a strong BTC rally. Traders usually call this “alt season”. However, despite the strong rally, Ether swiftly pulled back. There are two main reasons behind its correction: high funding and heavy sell orders at a key resistance level. According to data from Glassnode, the futures funding rate of Ethereum is averaging 0.2% across major exchanges. Normally, the funding rate stays at around 0.01% when the futures market is not overheated.
But even if ETH has pulled back there are still strong technical signals coming from some analysts that ETH has still a long way to go. “Top-tier” exchanges have registered ether trading volume of over $19 billion in the past 24 hours, versus $16 billion in bitcoin, according to data source CryptoCompare. So, ether is now the biggest cryptocurrency by trading volume. However, its $120 billion market capitalization is still far below bitcoin’s $600 billion.
Aside from increased demand, ether seems to be benefitting from a drying up of sell-side liquidity, according to Ki Young Ju, CEO of Korea-based blockchain analytics firm CryptoQuant. Exchange reserves of ether are down 20% compared to May 2020. The slide is likely the result of investors taking direct custody of ether or moving their coins to decentralized finance or staking on Ethereum 2.0, creating a shortage of ether supply in the market.
This might cause an additional price surge in ETH. If you want to take advantage of the potential 45% rise that Ether needs to gain to reach its all-time high you can click on the link below and invest with our trusted partner Binance:
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