Fundamental analysis: an enormous amount of call options and massive DeFi growth push ETH up
The second-largest cryptocurrency by market capitalization reached new all-time highs in the past 24 hours. The reason for the push was mostly its booming fundamentals, rather than technical factors. On-chain activity, DeFi sector growth, as well as the optimism coming from the ETH options market, contributed to the push past $1,500.
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Analysts at Laevitas, a data analytics firm, posted a statement where they said that 80% of Deribit’s ETH volume consisted of options market calls. This metric is suggesting that the buyers are rushing into the market, causing the spot market price to rise as well.
Taking a look at the weekly performance, ETH managed to post gains of 23.58% when compared to its position a week ago. This price gain outperformed BTC’s gain of 19.30% over the same period. At the time of writing, ETH is trading for $1,546, representing a 35.31% gain compared to last month. The second-largest cryptocurrency by market cap’s current market value sits at $175.37 billion.
ETH/USD technical analysis: Ether continues its move up on slowly descending volume
Taking a look at the daily chart, we can see Ether’s break from the sideways trading period, which many analysts labelled as an ascending triangle formation (21 January until 1 February). The cryptocurrency’s price responded firmly to the 21-day exponential moving average, and kept creating higher lows while maintaining its highs at the same level. This technical formation, alongside the descending volume, is not typically a bullish indicator. However, Ethereum’s fundamentals managed to prevail and ETH pushed higher to the new all-time high of 1,574.
Ethereum’s daily RSI indicator is slowly moving towards the overbought territory, with its current value sitting at 65.97.
Zooming in to the hourly timeframe, we can see Ether’s price increase as well as a volume spike when the cryptocurrency started contesting the $1,440 mark. Ether has passed the $1,440 as well as the $1,477.3 levels without much trouble as a part of the initial push. The cryptocurrency then continued its move up in a slower fashion and on lower volume, ultimately reaching an all-time high of $1,574.
With the volume on the hourly and daily chart fading, we can expect either a slight pullback or sideways coming from Ethereum unless a new wave of buyers steps in. ETH needs to keep itself above the 21-hour EMA to keep reentering price discovery mode an option. However, if we take the daily chart into consideration as well, ETH needs to close the current daily candle above $1,440 in order to stay bullish.