Ethereum [ETH] Rides High on DeFi, Break-out of Yearly High in View


ethereum

Ethereum [ETH] Rides High on DeFi, Break-out of Yearly High in View

Ethereum [ETH] has moved towards its yearly highs, as the market sentiments are starting to turn back bullish. 

The recent pullback (last ween on Tuesday and Wednesday) saw swift recovery with a 7.6% rise yesterday. The price of Ethereum [ETH] on 14: 3o hours UTC on 31st August 2020 is $232.

The volume-profile ratio indicator suggests that the price has moved towards a lower volume profile. Hence, a break-out above the current range is paramount for a renewed buying interest.

ethereum value

ETH/USD 1-Day chart on Bitstamp (TradingView)The funding rate on BitMEX for Ethereum perpetual has crept back to 0.2% daily. During extremely bullish phases, the funding rate runs high as 0.5-0.6%. Hence, there is still room for leveraged derivates buyers. On-exchange activity is seeing a decline since mid-August. An increase in Ethereum on exchanges is usually indicative of an impending sell-off. Data analytics firm tweeted,

The amount of $ETH held on exchange addresses has been on the decline since mid-August. Investors are holding onto their #Ethereum as a value holder during times where inflation is on the rise.

ethereum balance on exchanges
Ethereum [ETH] Balance on Exchange (Source)
This shift can also be attributed to the move towards DeFi platforms which offer higher yields on holding Ethereum or stablecoins. Ethereum as a platform for DeFi exchanges and Dapps, gains from the surge in on-boarding these platforms, acting as a gateway.

The DeFi Pump

The DeFi composite index on Binance is projecting a highly bullish stance of the market. According to a recent update, more than 85% of the participants continue to hold long positions on DeFi.

defi ecosystem
DeFi Market Sentiments on Binance (Source)

However, the high fees on for sending Ethereum [ETH] transactions remains to be a recurring concern for the market. The average GAS prices on top DeFi platforms is around 120 Gwei. As long as the yields are higher to compensate for the fees, the fees are not a big concern. However, the hysteria inches closer to a subsequent blow-out.

How long do you think that Fees Vs. farm yield discrepancy will continue? Please share your views with us. 

Author: Nivesh Rustgi
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com
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Nivesh Rustgi 1180 Articles
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com
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