The second largest cryptocurrency, Ethereum experienced a major rally over the weekend and has maintained the momentum going into the new week. According to data released on Monday by Coinmarketcap, the DeFi king is trading at $1,456, its highest market price since June 13, over a month ago.
Data shows that with the recent price rally, Ethereum has gained over 30% in July alone. Note that it started the month barely above $1,000. It has seen a 6.55% and 27.70% increase in the last twenty-four hours and in the seven days.
A significant return which outperforms the flagship cryptocurrency asset, bitcoin.
Data from Coinglass as of press time also shows that $170.24 million worth of Ethereum short positions has been liquidated over the past 24 hours due to the big price surge. The current Ethereum rally has been followed by a massive increase in the number of whale addresses.
According to Santiment, 131 new whale wallet addresses have popped up on the network. The increasing number of whales might show that investors are buying back into the cryptocurrency.
What is the cause of this surge?
Just before the weekend, ether holders got more clarity on the timeline of the long-anticipated merge.
During a conference call, Ethereum lead developer Tim Beiko disclosed that the much-awaited Ethereum mainnet migration to the Beacon chain is tentatively scheduled for September 19th – the timeline is still not final, meaning that the merge can still be postponed.
Note that the merge is the migration of the Ethereum network to the proof-of-stake consensus Beacon chain.
Following that announcement, the cryptocurrency experienced a massive rally in the run-up to the merge event. This is because Ethereum’s transition to proof-of-stake remains one of the few bright spots in the ongoing bearish market.
The event is expected to make the Ethereum blockchain more attractive for investors because the upgrade will cut down the decentralized finance ecosystem’s carbon footprint and improve its overall scalability and throughput.
Generally, Ethereum’s proof-of-stake transition has long been viewed as the main bullish catalyst for the second-largest cryptocurrency this year, which is why the most recent price spike was predictable. And now, the upgrade is expected to turn the tables for the cryptocurrency market that has had a difficult six months into 2022.
Peter Brandt says it may all be a hoax
Despite the rally and overall positive outlook for Ethereum, legendary financial market trader, Peter Brandt seems not to be impressed.
In a Twitter thread yesterday afternoon, the veteran trader threw cold water on Ethereum’s surge, claiming that it is “questionable.” The veteran trader noted that the most recent upturn came on extremely light volume.
“The upturn came on extremely light volume. I.E. the thrust was not based on aggressive buying from strong hands and is, therefore, questionable.”
This suggests that the weekend rally was likely a flash in the pan. Otherwise, the uptick would have been based on aggressive buying from strong hands, according to Brandt.
Peter Brandt suggested that Ethereum investors and holders have a reason to be cautious despite the latest price surge.
In simple terms, Brandt with his chart highlighted that the latest upswing was based on low volume and, as such, may not be sustainable. Recall that the renowned analyst had also predicted the price surge on Friday.
Generally, the crypto markets have shown significant resilience in the face of new record inflation numbers from the US last Wednesday, it will be interesting to see how the market holds up this week as the EU, UK, Canada, and Japan are scheduled to release inflation data.
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!