Ether is on a ride this week.
After nearly a month, ETH/USD hit $250 today. At the time of writing, the second-largest cryptocurrency has been trading at $265, last seen on February 24.
The five-month high came after bitcoin moved one leg up, but while BTC only moved about 2%, Ethereum is up over 9% and recording 102% gains YTD in comparison to BTC’s just 30% greens.
“Really nice impulse on the breakout. I ultimately think this will clear us near $365, but next step is to see how we behave at the $278-$290 range,” said trader Jonny Moe.
However, the trader DonAlt says it is “probably time to play the range again.” As such, Ether still needs to make a stronger and much clearer move to the upside.
The spike in Ether’s price saw it temporarily decoupling from bitcoin for the first time since April.
However, at the same time, nearly 700k ETH worth almost $183 million were moved by the top 100 whales in the past three days. Not a good sign for ETH price, according to Santiment, “this was likely pre-pump positioning & a forewarning of the pump.”
Amidst these gains, ETH longs on Bitfinex hit yet another all-time high in notional value of $488 million, seeing an increase of 10% in a fortnight, growing throughout 2020 but especially after the March crash when the digital asset went down to $100.
The jump in Ether’s price saw many positive developments, including breaking $900 million in volume across derivatives. Also, the aggregate open interest on ETH futures has risen to March level, before the crash, with a $1 billion break looking imminent, as per Skew.
While the price has moved only now, the daily gas usage on the network has been already at peak, remaining over the 70 billion mark for the past month — an increase of almost 2x compared to the beginning of the year noted Glassnode.
This persistently high demand for computations on Ethereum is the result of the ongoing DeFi (decentralized finance) craze.
Interestingly, the total ETH locked in DeFi has reached a new ATH as well at 4 million — 3.5% of the circulating supply of Ethereum, as per DeFi Pulse. This growth has been going on since June 11th, when 2.5 million ETH was locked in the sector.
However, this DeFi boom, along with stablecoin issuance surging past $12 billion, is putting pressure on the network as seen in the gas usage and network fees, which have skyrocketed to record levels.
This further calls for the urgency of the launch of Eth 2.0. Although the official launch date is still not confirmed and could be November 2020 or January 2021, the testnet release is just about here, scheduled for August 4th.