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Ethereum price breaks USD 3,500 and hits new 3-month high vs. Bitcoin
The second-largest cryptocurrency hits its best levels against the Bitcoin price and the dollar in more than three months.Ethereum price breaks USD 3,500 and hits new 3-month high vs. Bitcoin.
Ethereum’s native asset, Ether (ETH), extended its rally on September 1 to record a new multi-month high against Bitcoin (BTC) and the U.S. dollar (USD).
The ETH/BTC price rose 3.13% to reach 0.07475 for the first time since June 9. Meanwhile, bids for ETH/USD rose 3.4% to USD 3,546, the highest since May 18, showing renewed bullish sentiment in the market’s second-largest cryptocurrency after it consolidated sideways for more than three weeks.
Daily chart of ETH/USD and ETH/BTC pairs.
Ether’s price rise appeared despite wobbly price behavior in the cryptocurrency market. For example, Bitcoin prices remained stuck at around USD 47,000 while contemplating a clear breakout move above its psychological resistance level of USD 50,000.
Ethereum price set for 40% rally vs. Bitcoin after breaking a four-month range
Similarly, Ethereum’s main rival, Cardano (ADA), also consolidated sideways following its 100%-plus price rally in August, while its market dominance fell from 4.54% since August 8 to 4.26% at the time of writing.
Cardano prices and its market dominance versus all cryptocurrencies.
Over the same period, Ethereum’s market dominance increased from 18.17% to 19.65%, suggesting that Ether attracted capital from assets with overstretched interim valuations.
Ethereum’s rise above USD 3,500 coincides with a decline in ETH holdings across exchanges.
Blockchain analytics firm CryptoQuant reported that the amount of Ether held in exchange wallets has decreased from 19.45 million since August 18 to 18.75 million today.
Bitcoin price retests lower support levels as USD 50,000 remains out of reach
However, analysts perceive the drop in stocks as bullish, arguing that traders mainly withdraw their coins from exchanges because they choose to holdover them rather than sell them for other assets.
Ethereum’s balance on exchanges falls as the ETH/USD price rises.
In addition, more bullish signals have emerged for Ether prices due to the prospect of supply contraction.
CryptoQuant data shows that more than 6% of Ether supply is now locked inside Ethereum 2.0 smart contracts, or about 7.28 million ETH, worth USD 25.77 billion at the current exchange rate.
The total staking value in Ethereum 2.0 smart contracts exceeds USD 25 billion.
In addition, a new update to the Ethereum network, dubbed the «London fork,» has introduced a protocol that burns a fraction of its gas fees. Since its introduction on August 5, the so-called EIP-1559 has removed 156,986 ETH worth more than USD 555 million from supply, according to data provided by WatchTheBurn.com.
Demand outlook vs. supply contraction.
Ether is already up more than 380% in 2021, its gains driven by the emerging decentralized finance (DeFi) sector and non-fungible tokens (NFT). By comparison, Bitcoin has gained 62% year-to-date against the dollar.
Payal Shah, director of equity and cryptocurrency product development at CME Group, noted that Ethereum is equivalent to DeFi, a sector that allows users to trade, as well as borrow and lend assets directly to each other without involving central authorities such as banks.