Soaring Ethereum price resulted in $55M short liquidations
Vitalik Buterin’s billionaire status is now higher thanks to Ethereum reaching a new peak price of more than $3.5K yesterday. The amount of short-position liquidations reached a new high after the price of Ethereum peaked to a new high of more than $3.5K. Consequently, the number of short liquidations over most derivative exchanges also skyrocketed.
Why The New Rise in Price And Popularity?
According to Cryptoquant, short liquidations peaked at about $56 million. The effect caused the Ethereum market capitalization to each about $399.9 billion. Eth’s new ascendency might be connected with the renewed interest from institutional investors and commentators. In the past week, major banks, especially JP Morgan advised investors to buy more Ethereum for the long-term predicting that there is a high probability that Ethereum will surpass bitcoin. Some analysts are even predicting that Ethereum will soon reach the $10000 mark. If it reaches that mark, crypto enthusiasts will regard it as a noble achievement.
Ethereum’s groundbreaking move into the smart contract market is one other reason for the recent rise in Ethereum’s popularity. Users, developers, and investors continue to use Ethereum even though it hasn’t scaled in the last few years. Also, Ethereum’s first-mover advantage has seen it earn in transaction fees than bitcoin. For perspective, Ethereum fees have reached about $33 million in this month alone, while that of bitcoin is about $20 million less. No other platform has earned more in fees within the same period which further strengthened the demand narrative explained above. While bitcoin’s primary purpose is to be used as a store of value and a payment support service, Ethereum functions as a software system for assets or applications’ smart contracts without any interference from any third party. Thus, there is a difference between the way Ethereum and bitcoin use the blockchain. Hence, there has been a massive rise in the number of Defi applications that are powered by Ethereum.
Ethereum On-Chain Metrics And A New Bullish Run
Crypto analysts are suggesting that Ethereum’s on-chain metrics are a sign that the second-largest cryptocurrency based on the market cap is on a new parabolic advance. One of the goals of the proposed EIP-1559 is to ensure that the gas fees are lowered significantly. Also, Ethereum plans to burn fees-related ether to reduce transaction costs on the blockchain and attract more retailers to adopt it. Another metric that measures investor’s sentiment and investment interests on a blockchain is the number of active addresses performing transactions on it. The amount of active Ethereum addresses peaked during this past week. This growth suggests a significant increase in the usage and interaction over the past week and confirmed that Ethereum’s smart contract platform is still in high demand.
It was the availability of Ethereum’s smart contracts that led to decentralized exchanges (DEXes) which have grown to be an important factor in Ethereum’s new bullish run. As of this writing, Defi’s TVL stands at $77 million, an increase of over 80% in one year.
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