Ethereum Price Surge Suggests Possible Resurgence of 2017-style ETH Rally, According to Data Insights
In the world of cryptocurrency, Ethereum (ETH) is currently experiencing a significant rally, driven by both institutional investments and speculative activity in the futures market.
The shrinking supply of Ethereum on centralized exchanges (CEXs) is a key factor in this rally. At present, Ethereum's supply on CEXs stands at 13.4%, which is 13.4% lower than Bitcoin's 14.5%, indicating stronger demand for Ethereum. This trend could potentially indicate a rally is imminent.
One of the main contributors to this shrinking supply is Ethereum's growing staking market cap. The increasing popularity of staking Ethereum, a process where users lock up their ETH to validate transactions and earn rewards, is accelerating the dwindling supply of Ethereum on exchanges.
Institutional interest in Ethereum is also on the rise. BlackRock, a major financial institution, has been at the forefront of this trend, contributing to the heightened interest in Ethereum ETFs. On July 16, Ethereum Exchange Traded Fund (ETF) inflows reached a new daily all-time high, indicative of significant institutional interest. This surge is comparable to about $4.1 billion in Bitcoin inflows relative to its market capitalization, highlighting the scale of institutional investment.
The recent Ethereum price rally is also being driven by the derivatives market, with leverage-heavy futures positions playing a key role. However, the sustainability of this trend may depend on the follow-through from spot market buyers.
Analyst Mister Crypto predicts a rally for Ethereum, suggesting it could surpass $6,200, which would coincide with the high of $385 in 2017. Optimistic forecasts suggest that reaching $7,000 is no longer unrealistic, with some analysts pointing to sustained institutional demand as a driving factor.
However, it's important to note that momentum indicators such as the Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) have shown bullish signs, similar to previous instances that led to substantial rallies. However, the RSI is currently in overbought territory, which could indicate potential corrections.
Other entities, such as Trump's World Liberty Finance and SharpLink Gaming, have also been active in the Ethereum market. Trump's World Liberty Finance purchased $4.99M worth of Ethereum, while SharpLink Gaming acquired 10,850 ETH, increasing its Ethereum holdings to $1.03 billion. These purchases, along with BlackRock's sizable accumulation of Ethereum, place these entities on the radar of Ethereum's potential rally.
In conclusion, the current Ethereum rally is a result of a combination of institutional investments and speculative activity in the futures market. As the demand for Ethereum continues to grow, it will be interesting to see how this trend develops in the coming days and weeks.
- The supply of Ethereum on centralized exchanges is shrinking and currently stands at 13.4%, which is lower than Bitcoin's 14.5%, indicating stronger demand for Ethereum.
- One of the main reasons for this shrinking supply is the growing staking market cap of Ethereum, as the increasing popularity of staking Ethereum is accelerating the dwindling supply of Ethereum on exchanges.
- Institutional interest in Ethereum is rising, with BlackRock contributing to the heightened interest in Ethereum ETFs, as evidenced by Ethereum ETF inflows reaching a new daily all-time high on July 16.
- The recent Ethereum price rally is being driven by the derivatives market, with leverage-heavy futures positions playing a key role.
- Analyst Mister Crypto predicts a rally for Ethereum, suggesting it could surpass $6,200, which would coincide with the high of $385 in 2017. Other entities, such as Trump's World Liberty Finance and SharpLink Gaming, have also been active in the Ethereum market, potentially contributing to Ethereum's potential rally.
