Ethereum, the market’s second-largest cryptocurrency and the king of the altcoins, exhibited bullish bias at the time of writing. For the same, there seemed to be more than two reasons behind it. With the cryptocurrency’s price trading at $600 per coin, more price appreciation may be incoming and here’s why,
On-chain metrics
Ethereum investors
Source: Glassnode
It is clear that Bitcoin is mostly retail-driven, and the same applies to ETH as well. This, despite ETH’s initial pre-mine. In addition to this, ETH addresses holding more than 1 ETH hit a new ATH on the charts recently.
What does this mean?
Well, the retail-driven market is maturing and more investors are investing in ETH. Rightfully so, especially in light of the recent DeFi summer and ETH 2.0 going live.
Basically, more ETH addresses with more than 1 ETH means more hodlers – a bullish development.
Ethereum reserves
Source: CryptoQuant
The more coins on exchanges, the more of that coin can be sold. By this logic, we can consider a coin bearish if the exchange reserves of the said coin are high.
For Ethereum, these reserves have been dropping since May 2020 and from this point onwards, we have seen ETH grow by 192% on the price charts.
Considering this trend’s continuation, we can expect ETH to register higher price appreciation. Hence, it can be concluded that Ethereum is indeed showing a bullish bias in the short-to-medium term.
ETH 2.0
ETH 2.0, until recently, was a much-anticipated event. However, this wait was ended on 1 December after ETH 2.0 beacon chain was launched. Although the overhaul is going to be done in a step-by-step process, users seem to be bullish on ETH.
Grayscale, the go-to marketplace for investors and retailers alike, has clearly mentioned that there has been a rise in interest in Ethereum.
In fact, in an interview with Bloomberg, Michael Sonnenshein, Managing Director at Grayscale Investments LLC, said,
“Over the course of 2020, we are seeing a new group of investors who are Ethereum-first and in some cases Ethereum-only. There’s a growing conviction around Ethereum as an asset class.”
Fueled by post-DeFi jitters and with ETH 2.0 to look forward to, Ethereum has good reason to look quite bullish.
