Factors causing today’s Ethereum price rise
Today, Ethereum is showing notable gains, rising more than 4% to around $3,200. Ethereum’s rise reflects a broader trend across the cryptocurrency market, which has seen its overall market capitalization surge by 3.5%.
Moving cash flow from Bitcoin to Ethereum
A significant driver of Ethereum’s rise today is the notable capital inflow from Bitcoin. Ethereum benefits when Bitcoin shows a slight decline, as it is quoted at $64,854. Notably, the ETH/BTC ratio increased by approximately 2.5% over the past 24 hours, hitting 0.048 BTC by April 21. Along with these changes was the launch of the Ethereum Dominance Index (ETH.D), which measures Ethereum’s market strength against other markets. The cryptocurrency rose more than 1%.
This rally is not sudden, but is part of a rebound that began on April 19 to coincide with Bitcoin’s fourth halving. After this event, Ethereum’s relative strength against Bitcoin grew. The ETH/BTC ratio is up about 3%, while ETH.D is up about 0.75%.
Historically, a similar trend has been seen following Bitcoin halvings. For example, after the second halving in July 2016, Ethereum surged 64% compared to Bitcoin. Since the third halving in May 2020, it has nearly doubled in value compared to Bitcoin. This pattern suggests that investors may believe that the expected Bitcoin price rise from the halving has already been accounted for and reallocate their bets to Ethereum.
Whale movements and technical indicators
Ethereum’s current surge is being further strengthened by the behavior of whales. According to data from Glassnode, the amount of Ethereum held in addresses containing between 1,000 and 10,000 ETH has increased over the past two weeks. Moreover, the number of people holding between 10,000 and 100,000 ETH is also increasing, indicating a strong restoration of confidence among large investors in Ethereum.
On the technical side, Ethereum’s price support mechanism is showing strength. The cryptocurrency has effectively tested the lower trendline of its recent descending channel pattern. This is closely aligned with the 0.5 Fibonacci retracement level around $2,800 and the 200-day exponential moving average (EMA) near $2,700. These technical indicators are considered favorable areas for traders to buy Ethereum, indicating strong market support.
Adding to the Ethereum intrigue, a dormant Ethereum wallet that had been inactive for nearly nine years suddenly came to life. Since the pre-mining phase of Ethereum before its official launch in 2015, this wallet has contained 197 ETH with an initial value of approximately $61.
The storage unit is currently worth approximately $622,685. The activation of these wallets has sparked widespread speculation about the identity and motivations of the wallet owners, suggesting a strategic move by early Ethereum adopters who have either just rediscovered lost keys or decided now is the time to re-enter the market.
All of these factors paint a comprehensive picture of why Ethereum is currently experiencing an unpredictable upward trend. Each component contributes to the bullish outlook for Ethereum in the cryptocurrency community.
Source: https://www.cryptopolitan.com/factors-behind-todays-ethereum-price-rally/
