Key Points
Ethereum (ETH) achieved a new high for the year, reaching $3,822 on March 5, following an 8% surge over the previous 24 hours.
As the second most valuable cryptocurrency, Ethereum has seen a 15% increase over the past week and a remarkable 132% rise over the last six months.
Factors Contributing to Ethereum’s Rise
According to data from TradingView and Markets Pro, Ethereum’s price was approximately $3,796, which is about 28% less than its all-time high of $4,891 recorded on November 26, 2021.
Alongside Ethereum’s rally, there has been a significant 68% increase in daily trading volume, currently standing at $33.29 billion.
With a market capitalization of $453 billion, Ethereum solidifies its position as the second most valuable cryptocurrency, as reported by CoinMarketCap.
Increased inflows into spot Bitcoin ETFs and the upcoming Bitcoin supply halving, along with other fundamental factors and on-chain metrics, are driving the wider crypto market’s uptrend, which includes Ethereum.
Glassnode, an on-chain market intelligence firm, reports that the supply of Ethereum on exchanges is decreasing, supporting its upward trend.
The balance of Ethereum on exchanges has reached a 20-month low of 13.14 million ETH, reflecting a 7.7% drop over the last 90 days.
Since October 2023, there has been a steep decline in the total balance between inflows and outflows in and out of all known exchange wallets, coinciding with a 130% increase in Ethereum’s price.
Decreasing Ethereum balances on exchanges indicate that investors may be transferring their tokens into self-custody wallets, suggesting they do not intend to sell in anticipation of future price increases.
This is corroborated by a recent increase in accumulation by large holders.
Further data from Glassnode reveals that the number of wallets holding $100,000 or more worth of Ethereum has been increasing since the start of February.
Moreover, the rising number of Ethereum staked on the Beacon Chain also contributes to the decrease in Ethereum tokens available for trade.
Data from Dune Analytics indicates that over $31.58 million ETH, valued at $119.8 billion at current rates, is now staked on Ethereum’s proof-of-stake layer protocol.
This implies that 26.3% of Ethereum supplies have been staked and are unavailable in the market, with over 987,000 individual validators participating.
The popularity and adoption of Ethereum liquidity protocols are growing, as evidenced by the total value locked on EtherFi surpassing the $2 billion mark.
Increased demand for leverage has led to a surge in Ethereum futures open interest (OI), which is currently around $11.98 billion, nearing the $13 billion peak observed on November 9, 2021.
Data from Coinglass shows that Ethereum futures OI broke above $8 billion on February 12, having been under this level for over two years.
From that point, the OI has risen nearly 50% in less than two weeks, indicating an increased demand for leveraged Ethereum positions.
Investors’ optimism and anticipation for a spot Ethereum ETF approval are reflected in Ethereum’s on-chain and derivatives markets.
The upcoming Dencun upgrade could also be providing some bullish momentum to Ethereum’s price.
