Ethereum, the world’s second-largest digital currency, saw a strong bullish rally on Friday after ETH touched the price level of $3,980, which is the highest level since May 2021. Ethereum is currently eyeing its all-time high of $4,170.
According to Coinmarketcap, the latest rally in Ethereum is causing a sharp surge in the overall crypto market dominance of ETH. The digital asset now accounts for approximately 21% of the total crypto market cap.
On the other hand, Bitcoin saw a drop in its overall share of the crypto market as BTC’s dominance reached 41%. Ethereum is now up by more than 25% in the last seven days. The total market cap of ETH increased by more than $100 billion this week.
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“ETH is surging today and looks close to breaching the $4,000 level. This rally takes it closer to ETH’s all-time high of $4,177 set in mid-May this year. Often, other than general market sentiment, it can be hard to identify why a particular asset is rising in value, as momentum can carry values higher. But, in the case of ether (ETH) right now, a number of factors are creating significant upward pressure on the price of the coin. Firstly, the number of transactions happening on the Ethereum network is increasing again, but perhaps more significantly the gas being used on the network is near all-time highs,” Simon Peters, Market Analyst at eToro, commented.
Ethereum’s London Hard Fork
The latest bullish sentiment in Ethereum accelerated after the London upgrade during the first week of August. Since then, the demand for ETH has increased substantially.
“A combination of high gas usage and the London hard fork, the EIP-1559 upgrade which happened at the beginning of August and introduced a ‘burning’ of ETH tokens, is resulting in less new Ethereum coming into circulation than before the hard fork. Secondly, the quantity of ETH tokens being locked into DeFi is rising. This is placing added pressure on the supply of the crypto asset as more tokens become essentially unavailable to the market for trading,” Peters added.