Ethereum price soars back towards all time high as NFT mania continues

Posted: 10 March 2021 5:07 pm

Ether is back above US$1800 after a week of positive growth likely fueled by the growing NFT market.

  • Ether offloading across various centralized trading platforms has continued to increase.
  • In a recent interview, ETH co-founder Vitalik Buterin claimed that upcoming layer-2 solutions such as 'Optimism' can help ETH scale up by a factor of 100x.
  • ETH is still continuing to showcase a massive amount of monetary correlation with BTC.

After scaling up to a price point of US$1,883 just a few hours ago, Ether is continuing to showcase an increasing amount of bullish momentum, with the premier altcoin having dipped below the all-important US$1,800 resistance level just once over the course of the last 24 hours. At press time, the second-largest currency by market capitalization is trading at US$1,805.

Providing his thoughts on the matter, Gaurav Dahake, CEO of cryptocurrency exchange BitBNS, told Finder that the upward movement that is currently being witnessed in relation to ETH is largely being driven by the interest that institutional players are showing towards BTC. He added that the premier altcoin will continue to follow BTC for the foreseeable future but may start to showcase signs of decoupling in the mid-term, adding:

"The fees narrative has resulted in some of ETHs momentum shift towards Cardano, Polkadot, and BNB. That said, ETH will go upwards as EIP 1559 has been passed and July is just 18 weeks away"

However, Sumit Gupta, CEO and co-founder of crypto trading platform CoinDCX, leans towards the notion that an increasing number of investors — be it retail or institutional — are starting to view Bitcoin and Ether as two completely separate technological and monetary prospects, rather than looking at them from a macroscopic lens.

He pointed out that while occasional co-relations will continue to occur from time to time, the trend observed over the past couple of months is, by and large, pointing to the fact that an increasing number of altcoins will continue to decouple from BTC in the future.

Lastly, Gupta highlighted that the recent developments being witnessed in relation to the Non-Fungible Token (NFT) space will help ETH's popularity grow even further and will help the currency become increasingly more independent in terms of its monetary movements, adding:

"The recent developments taking place with regard to NFTs is a brilliant use case leveraged by the crypto community. Recently, an original Banksy burned by a group of crypto enthusiasts was bought by a crypto company Injective Protocol. They bought it for 228.69 ETH, or roughly $380,000."

ETH continues to exit CEXs

As more and more people continue to explore the burgeoning DeFi space as well as understand the importance of owning their private keys, an increasing amount of ETH is continuing to exit various centralized exchange platforms. In this regard, IntoTheBlock released its latest "Net Flows" indicator showcasing the outflow of 104.79k ETH from major crypto exchanges over the course of the last 24-48 hours.

A chart showing the outflow of Ether from centralised exchanges.

ETH volume exiting CeFi platforms (source: IntoTheBlock)

As can be seen from the chart above, the volume of Ether that has continued to exit traditional crypto trading platforms over the course of the last week (as well as the last 30-days) has continued to increase, with the largest dips coming during the month of January.

Vitalik Buterin: "ETH scaling imminent"

In a recent interview with American entrepreneur and investor Tim Ferriss, Ethereum co-founder Vitalik Buterin expressed his strong belief that until ETH2.0 sharding goes live, rollups will be able to solve the altcoin's existing scaling concerns.

During the aforementioned discussion, he went as far as saying that the Ether network is on the verge of scaling by a factor of 100, stating that the release of 'Optimisim' will help mitigate many of the major concerns currently surrounding the currency's network. On the subject, he added: "Rollups are coming very soon. We're fully confident that by the time that we need any more scaling of that, sharding will have already been ready for a long time by then."

In their most basic sense, rollups can be thought of as 'second-layer solutions' that can help in the faster processing and storing of transaction (tx) data on a designated sidechain before amalgamating the final data sets and sending them onto the main chain. In essence, they help ease out network congestion as well as reduce tx fees.

Buterin is hopeful that the 'Optimism' team will launch their fully Ethereum Virtual Machine-compatible rollups in the next 30 odd days. Not only that, it is also expected that the technology will be incorporated some of the largest players in the DeFi market, including Uniswap, Aave, and Synthetix.

Lastly, it bears mentioning that just a week or so ago, Buterin revealed that he had authored the proposal for a digital system that can potentially allow smart contracts to interface with one another even if they are placed across different layer-two scaling solutions.

Interested in cryptocurrency? Learn more about the basics with our beginner's guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.

Disclosure: The author owns a range of cryptocurrencies at the time of writing

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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