Ether (ETH) price fell to $ 1,660 in the first hours of February 15 and improved 9 percent in the next 10 hours. This price action triggered the liquidation of the $ 280 million futures contract.
While initial concerns about CME’s ETH futures initiated on February 8 have passed, the increased transaction fees may have damaged investors’ confidence. Still, the fundamentals behind Ethereum remain strong, suggesting that the Ether price should recover immediately after the lows.
Ethereum Price Index: How many TL (ETH TL) for Ether?
Although the chart above can be interpreted positively, not every user can afford the $ 12 transaction fee. The fact that a simple token transfer on decentralized exchanges (DEX) requires hundreds of dollars to pay gas fees, giving small investors no choice but to leave the network.
Some names like Skale and Optimistic Network are testing sharding and tier two solutions to solve this problem. ETH 2.0 will use sharding to divide the blockchain network into several parts and increase the number of transactions the network can execute at the same time.
Locked-in value continues to rise
The growth of total value (TVL) locked in decentralized finance projects should not be ignored either. Adjusted TVL metric excludes growth due to ETH price increases, providing more reliable data.
As seen above, the 34 percent increase coincides with the 38 percent appreciation of Ether in February. Independent of transaction fees, the value generated by automated market-making pools and staking mechanisms still exists.
More data is needed to understand whether the recent price crash reflects a possible peak and the next downtrend. In addition to price action and technical analysis, investors should also examine on-chain metrics such as network usage. This review can be best started by analyzing transaction and transfer values.
Coin Metrics data reveals that 14-day average transactions and transfers are over $ 9 billion a day, up 32 percent compared to the previous month. This significant rise shows the strength of the cryptocurrency and the sustainability of the price at current levels.
Stock market pull data point to long-term accumulation
While there is no consensus among analysts on how the withdrawals from the stock markets will affect the price in the short term, the effect will be either neutral or positive. On the contrary, the transfer of a large amount of Ether to the stock markets will indicate a decline as the investors will show the intention to sell.
Approximately 600 thousand Ether were withdrawn from exchanges between 1-15 February. Regardless of whether the whales move these Ether to cold wallets or transfer them to the DeFi ecosystem, cryptocurrencies are unlikely to be sold in the short term.
Considering that this move happened when Ethereum broke a record at $ 1,870, it can be understood that investors are trusting cryptocurrency.
As a result, all these signals suggest that Ether hitting $ 2,000 is only a matter of time.
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