Yesterday, Ethereum reported a new ATH at $2000, and at the time of writing it slipped marginally on the price charts. The price has risen by more than 5 per cent in the past 24 hours and more than 12.5 per cent in the past week, and the recent price action makes retailers wonder whether this is Ethereum’s way of compensating those who missed the chance when bitcoin likes traded at a relatively low price last year.
Since Ethereum’s price hit a new high, one of the key metrics that indicate the direction of the price rally is the total number of transactions. Based on data from the Etherscan chart, the total number of transactions on the ETH network is currently close to crossing the ATH of 1.4 million that was registered in September 2020. Currently, the number of transactions is 1.29 million, and is increasing.
In order to maintain a level similar to or above $2000, the trade volume should preferably be reached by a new ATH. The asset price has risen by more than 160 per cent since the beginning of 2021, and this makes the asset compete well with Bitcoin, which has a ROI of over 90 per cent since the beginning of 2021. Major altcoins have reported double-digit gains, but a pullback has followed, and since January 2021, price fluctuations have occurred more than twice.
In the case of Ethereum, market negatives have been less severe and the trend is likely to continue with higher prices without significant short-term corrections. Similar to the case of Bitcoin, Ethereum derives value from supply shortages and the Ethereum outflow from exchanges has increased.
Based on the above chart, the outflow has increased since the beginning of February 2021. Although it is less than January 2021, the current outflow is at the same pace as Q4 of 2020. Outflow signals that Ethereum is leaving exchanges for private wallets, or cold storage, and this may benefit Ethereum by propelling it to another ATH. The on-chain analysis is neutral, however, $2000 could be here to stay until Ethereum hits another short-term top or price rally.
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