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Ethereum, the top altcoin, was trading around $3800 after an exponential run that saw it test the $4,000 psychological milestone on September 3. It has managed to hold its ground, remaining far above $3750. If it can recover over $3,860, a retest of the all-time high is in the cards for ETH.
So, how far will the Ethereum rise take us? The answer can be found in the measurements shown below.
Highest network valuation in over a year
Ethereum’s NVT signal (14-day moving average) has touched a 17-month high not seen since August 2020. A high NVT value indicates that the network’s valuation exceeds its transaction volume. When NVT is high, the network value is significantly greater than the value being transferred on the network; while this may suggest a potential bubble, in the case of Ethereum, it signified legitimate growth stages in addition to robust price movement.
Notably, whenever the NVTS saw parabolic growth over the last two years, Ethereum experienced a protracted rally with large price increases. A similar pattern was observed around the beginning of January 2020, when Ethereum increased by about 140 percent in just one month.
Interestingly, a 140 percent increase from a low on July 20 will take the alt near $4300, which is close to the ATH of $4,337.10. Thus, a strong NVTS trajectory with gains of around 140 percent might propel ETH to its ATH and possibly beyond if the NVTS rally continues.
However, a drop in Ethereum’s active addresses, which has brought it to an all-time low of eight months, is a concerning trend, but an increase in active addresses can push the surge even farther. A surge in active addresses before to ETH’s ATH would be critical.
The future of ETH futures looks good
Apart from the high network value, other factors influencing ETH’s price are the open interest and daily volume of ETH futures. Based on data from Skew, ETH options volume was increasing during the last week. In fact, on September 1, Ethereum saw the highest peak in options volumes followed by another small peak two days later.
Furthermore, on Okex, Ethereum’s Open Interest in Perpetual Futures contracts hit a 13-month high of $589,275,968.65. ETH futures aggregated open interest was high on other exchanges as well, approaching the May ATH of 10.9 billion. At the time of publication, the total Futures Aggregated Open Interest was at 10.6 billion. Those hoping to benefit from Ethereum may find the derivatives market to be an appealing possibility.
ETH’s path to ATH
The ascent of Defi, NFT marketplace tokens, and other altcoins will be dependent on the leading altcoin hitting its ATH. Furthermore, with multiple projects closely following ETH in terms of price action and correlation, ETH might enhance the overall market capitalisation of Defi. For the time being, ETH was about 30% below its all-time high. However, a push from spot traders and an increase in active addresses may ensure its upward trajectory.