Over the weekend, the Ethereum price reached a new yearly high, surpassing the $2,200 mark for the first time in 2023. This surge has generated speculation about the factors driving the price increase.
Ethereum Following The King: Bitcoin
One of the main reasons for Ethereum’s price surge is the upward trend in Bitcoin’s price. Bitcoin’s surge to yearly highs in November and the subsequent rise above $40,000 this year have positively impacted the entire market, including Ethereum. Despite Bitcoin’s dominance, altcoins like ETH have also experienced rallies. Moreover, a significant Ethereum short squeeze led to over $30 million in shorts being liquidated.
Greed Is on The Rise
The market has seen a surge in greed as prices have rebounded. This has attracted new capital into the market, contributing to the increase in Ethereum’s price. The Crypto Fear & Greed Index reveals that greed levels among crypto investors are currently among the highest of the year, scoring 74 on the index. Although the index has not reached extreme greed levels, the ongoing rally may continue as such rallies typically plateau when extreme greed prevails.
Whales Get In on The Action
Ethereum whales have been actively purchasing large volumes of the cryptocurrency, leading to a significant increase in its trading volume, which rose by 17% in just one day to reach $11.4 billion.
The surge in trading volume indicates that large investors, rather than smaller ones, are driving the current market activity. According to a report by NewsBTC, Ethereum, along with Bitcoin, has dominated the total crypto trading volume recently.
Ethereum Lagging Behind Bitcoin
Despite closely following Bitcoin’s performance, Ethereum has not seen the same levels of growth. While Bitcoin reached a new yearly high in November, ETH did not achieve this until December. Furthermore, Ethereum’s lag behind Bitcoin is evident in its current trading value of $2,200 compared to Bitcoin’s $41,000. Nonetheless, Ethereum remains bullish, with a 3.91% increase in the last 24 hours, bringing its price to $2,248 at the time of writing.
Image Source: Hi my name is Jacco @ShutterStock
