Ethereum’s (ETH) price rises due to staking, whale purchases, and optimism for an ETF, reflecting a bullish market sentiment.
Ethereum (ETH) has showcased a remarkable performance, experiencing a notable increase in its price. ETH has surged by more than 3% in the last 24 hours, pushing its value beyond the $2,800 mark. This upward trend isn’t isolated, as Ether’s price has seen a 16% boost over the past week, closely aligning with Bitcoin’s (BTC) 16.3% gain during the same timeframe.
Key Factors
Several key elements contribute to this bullish momentum. One major factor is the decreasing availability of Ether on various exchanges, primarily due to the growing trend of staking and significant acquisitions by large-scale investors, known as whales. Additionally, the optimism among both retail and institutional investors has played a pivotal role in propelling Ether’s value upwards.
A critical development bolstering Ethereum’s ecosystem is the increasing volume of ETH staked on the Beacon Chain. Current data reveals that over 30 million ETH, representing approximately 25.56% of the total supply, is now staked. This staking activity, valued at over $86.68 billion, signifies a robust commitment to Ethereum’s future. Notably, a considerable portion of this staked ETH, about 31.65%, is managed through Lido, indicating a strong preference for this staking solution.
The period between February 1 and February 15 saw investors depositing more than 600,000 ETH into Ethereum 2.0’s staking contract. This movement underscores the community’s faith in Ethereum’s upgrade and its potential to enhance network efficiency and security. Moreover, the rise in Ethereum’s restaking protocols, such as EigenLayer, which saw a 33% increase in total value locked (TVL) over the last week, further solidifies the network’s staking ecosystem.
Bullish Sentiments
Ethereum’s price movement often mirrors that of Bitcoin, setting a precedent for future trends. With Bitcoin breaching the $50,000 mark on February 12, anticipations are high for Ethereum to surpass the $3,000 threshold soon. This sentiment reflects in the derivatives market, where there’s a noticeable uptick in long position bets among professional traders. A significant spike in the ETH funding rate to 0.4% on February 13 suggests a bullish outlook, with traders ready to pay premium fees in expectation of a price increase.
The anticipation of a spot ETH exchange-traded fund (ETF) approval in the first half of 2024 has further fueled investor optimism. Franklin Templeton’s recent S-1 application filing with the SEC marks a significant step towards this reality, showcasing institutional interest in Ethereum. This optimism derives from the actions of Ethereum whales who have significantly increased their holdings, contributing to the price surge. Blockchain analytics highlight a particular whale’s purchase of approximately 69,500 ETH, valued at $179 million, as a testament to the growing confidence in Ethereum’s future prospects.