Ethereum
Ethereum price rocketed to a high of $1,100 as enthusiasm about digital currencies continued. The currency has risen by almost 1,000% from the 2020 low of $90. Other currencies, including Bitcoin, Litecoin, Chainlink, and Bitcoin Cash have also rallied substantially in the past few months.
What happened: Cryptocurrencies have been in high demand recently, fuelled by low-interest rates and high demand by institutional investors. In the United States, companies like Microstrategy, PayPal, and Square have accumulated Bitcoin worth billions of dollars. And analysts believe that this trend will continue in the near term.
What about ETH: In addition to crypto demand, Ethereum price has soared because of the rising demand for Decentralised Finance (DeFi) products. According to DeFi Pulse, the total value locked in DeFi has risen from below $1 billion in January 2020 to more than $17.45 billion.
At the same time, the number of DeFi projects with more than $1 billion has increased to 6, with Maker being the biggest one. The Ethereum price has also risen because of the ongoing transition from Proof of Work to Proof of Stake, which is also known as ETH 2.0.
Ethereum price rose to above $1,100 but it has pared-back some of those gains to the current level of $930. On the daily chart, it is still above all moving averages while the Relative Strength Index (RSI) is in the overbought level of 70.
Therefore, while the overall trend is bullish, I suspect that the price will pullback for a while. If it does this, the next key level to watch will be $750, which is the lowest level on Friday.
