On Dec. 17 , Ether (ETH) price rallied to $677, its highest level since May 2018, and it seems the top altcoin’s price was driven by Bitcoin’s (BTC) swift move above $21,000. It’s also possible that the CME’s ETH futures launch announcement also played its part.
Solid fundamentals and positive newsflow also seem to be helping Ether to hold above $640 for the past few days, and despite today’s dump, these fundamentals remain. Eth2 staking surpassed $1 billion in total value locked, and this shows that large players are committed for the long-term, as it is not currently possible to redeem these tokens.
To understand whether the recent pump reflects a temporary excitement or potentially a new price level, one should gauge the usage metrics on the Ethereum network.
An excellent place to start is analyzing transactions and transfer value.
The chart above shows just how strongly the indicator recovered after a brief drop on Dec. 15. The sustained level above $2 billion daily transactions and transfers signals a healthy improvement from the previous two months.
Therefore, the move to $640 was in line with Ethereum blockchain activity.
Exchange withdrawals resumed
Increasing withdrawals from exchanges can be caused by multiple reasons, including staking, yield farming and buyers sending coins to cold storage. Usually a steady flow of net deposits indicates a willingness to sell in the short term.
Between Dec. 16 and 18, exchanges faced 232,000 Ether deposits, reverting a trend that lasted 14 days. During those two weeks, withdrawals surpassed deposits by 470,000. This shows that there was sell pressure as Ether’s price crossed above $600.
It is worth noting that Dec. 19 marked a 293,000 Ether net withdrawal, the largest outflow since Oct. 14. Thus, the initial movement of investors rushing to take profit above $600 might…