3 Reasons Why Ethereum Price Rallied 75% to Hit a 2-Year High at $395
In the last two weeks, Ether (ETH) price increased by 75% as the price rallied from $222 to $390. Many investors believe Ether’s momentum is buoying the entire market, and possibly even pushing Bitcoin (BTC) upwards.
Three factors that appear to be triggering the strong Ether rally are: DeFi, ETH 2.0, and the current prolonged rally taking place in the altcoin market.
DeFi growth is pumping altcoins but there are bearish signs
Since mid-June, the total value locked in decentralized finance (DeFi) protocols has continuously surged. The launch of protocol-specific tokens, like Compound’s COMP as an example, led to growing demand for DeFi.
Eventually, users discovered a phenomenon called “yield farming”, which involves users searching for higher yields in the DeFi market and switching from one protocol to another to obtain incentives.
The explosive growth of the DeFi market in a short period led many DeFi-connected tokens to surge rapidly. In July, investors seemingly sold off DeFi tokens and other small market cap altcoins, moving back to Ether and Bitcoin.
Today Ether price reached a 2-year high as it surged to $395 on BitMEX but this has traders warning against a potential pullback. In fact, crypto-trader Edward Morra said:
A consistent positive factor that supports the upward momentum of Ether is the anticipation for ETH 2.0. In August, Ethereum developers expect to launch the final testnet of ETH 2.0 called Medalla.
When fully launched, ETH 2.0 would gradually eliminate miners from the network and reward users for participating in ...
More on: cointelegraph.com