By
Temitope Olatunji
April 18th, 2024
The potentials in the price of Ethereum to soar to new levels is backed by the rise in the coin’s Total Value Locked (TVL) on DeFi platforms.
The price of Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has been constantly touted to break past the $2,000 psychological level, and the latest key fundamentals in the crypto point towards this. There has been a mix of bullish and bearish runs in the crypto market space with Ethereum known to experience these upswings on a regular basis.
At the time of writing and according to CoinMarketCap, Ethereum is currently priced at $1,798.23 after seeing a 2.10% gain in the past 24 hours. From observations in recent times, there exists little correlation between Bitcoin (BTC) and Ethereum as a pump in the former hardly translates to a surge in the latter.
The need for scalability and measures to reduce the skyrocketing transaction fees associated with the network is becoming a major agenda for the Ethereum Foundation. Although data from BitInfoCharts revealed that the average transaction fees of the cryptocurrency have dropped in February, they are still relatively high when compared to other networks’ charges.
This makes the Ethereum network to be unattractive to traders and may account for the occasional drop in the price of the coin. However, other metrics are healthy and backs the digital asset’s strides to soar in the coming days.
Ethereum Price Boosted by TVL in DeFi and Longer Exchange Holds
The potentials in the price of Ethereum to soar to new levels is backed by the rise in the coin’s Total Value Locked (TVL) on decentralized finance (DeFi) platforms. According to data from DeFi Pulse, the total value locked on DeFi platforms is 7.735 million ETH, up from 6.625 million ETH recorded back on January 11, 2021.
The growth in the TVL corresponds with Ethereum’s price surge of over 45% this February. Another metric that points to the potentials of ETH to retest new highs is the number of coins held in exchanges. About 600,000 ETH have been withdrawn from trading platforms from January 1 to February 15th. These outflows suggest that Ethereum owners are transferring the coins to a cold wallet or for use in decentralized finance ecosystems.
The confidence is brewed with this aforementioned action as any opposite move, that is, inflows into exchanges may indicate a willingness to liquidate. These data show Ethereum price is sustainable at current levels, and any purchase action based on the prospects of the Ethereum 2.0 upgrade may help usher in a new bullish run to breach the long-awaited $2,000 price levels.