Ethereum price has hit a new yearly high following a massive weekend rally that sent most cryptocurrency markets into the green. The rally pushed the price of Ethereum above the $2,200 level for the first time in 2023 and sparked speculation about what was causing the price surge.
Ethereum Follows the King: Bitcoin
One of the main reasons why the price of Ethereum has hit a new yearly high is the fact that the price of Bitcoin is also on the rise. Bitcoin, which is benefiting massively from the hype surrounding the approval of a potential spot Bitcoin ETF, jumped to its own annual high last November, with the leading cryptocurrency pulling the rest of the market higher after breaking the $40,000 level this year. .
Interest in Bitcoin has flowed to cryptocurrencies like ETH, and despite Bitcoin’s dominance still being high, that hasn’t stopped altcoins from actually rallying along with it. Additionally, Ethereum short selling occurred, with over $30 million worth of short selling being liquidated.
Greed is on the rise
As prices recovered as expected, greed ran rampant in the market. This helped new funds enter the market, which also pushed the price of Ethereum higher. According to the Crypto Fear & Greed Index, greed levels among cryptocurrency investors are at their highest level this year.
The current index scores 74 points, which is close to extreme greed. However, the fact that the index has not entered extreme greed territory suggests that the rally may not be over. Because these rallies usually end when extreme greed is running high.
ETH rises to a new yearly high | Source: ETHUSD on Tradingview.com
participate in whale activities
The activity of Ethereum whales, which purchase cryptocurrency in large quantities, has become more active. Ethereum’s trading volume increased significantly, reaching $11.4 billion, up 17% in the last day alone.
This significant increase in trading volume means that large investors, not small investors, are actually taking the lead this time. As NewsBTC reports, Ethereum, along with Bitcoin, has recently dominated overall cryptocurrency trading volume.
Ethereum lags behind Bitcoin
Interestingly, while Ethereum’s price mostly tracks Bitcoin, it does not perform as well as Bitcoin. For example, Bitcoin hit a new yearly high in November, but ETH didn’t do so until December.
Then, looking at the charts, we see that last time Bitcoin price was above $41,000 and Ethereum price was trading at $2,700. However, this time, ETH has lagged behind and is currently trading at $2,200 compared to Bitcoin’s $41,000.
Despite this, Ethereum is still looking very bullish. The price is trading at $2,248 at the time of writing, up 3.91% in the last 24 hours.
Featured image from Forkast News, chart from Tradingview.com