Ethereum’s price has been very bullish lately, with the cryptocurrency surging to touch new ATHs on the charts. While the year 2021 did see ETH hike exponentially, Ethereum has also managed to register a new ATH with regard to the total value in the ETH 2.0 Deposit Contract.
At the time of writing, Ethereum 2.0, the network upgrade for ETH, had crossed 3 million ETH under its deposit contract, with its total value locked coming close to $6 billion on the charts.
Source: Glassnode
This is a significant development for the world’s largest altcoin, with the same likely to be a key driver as it closes in on the $2k-range. ETH’s deposit contract was launched in November and despite the delay with regard to ETH 2.0, it was able to secure the required amount of ETH to lock in the Beacon Chain’s launch in December.
At the moment, the Beacon Chain is a bridge network between the present Ethereum network and Ethereum 2.0 and will help in the complete migration in the near future.
Alongside these developments, the price of Ethereum has also been noting significant investor confidence. ETH’s price has risen by a whopping 174 percent in less than 2 months’ time and two key factors seem to be backing the altcoin’s rally at the moment – investor confidence and good network health.
The hash rate is a very crucial factor when it comes to determining a coin’s network health and in the case of Ethereum, the network hash rate has been on a steady rise for over a year. In fact, ETH’s hash rate, according to data provided by Etherscan, showed that it had climbed to record levels of 403,378.9310 GH/s on 17 February.
Source: Etherscan
There has also been a lot of activity in terms of daily transactions on the Ethereum network. Data continues to show that a significant number of transactions are happening on the Ethereum blockchain, further substantiating the fact that the coin’s price surge has been backed by organic growth.
Source: TradingView
This is also one of the reasons why one can safely say that Ethereum, even if subjected to an upcoming price correction, will not necessarily lose too much of its current value. Over the past week, the coin has built up a lot of support around the $1700-$1750 price range, a zone that will be key to stabilizing the price if the coin sees a trend reversal in the future.
Source: Coinshares
With many altcoins surging on the charts, Ethereum’s long-term prospects at the moment seem to be extremely positive. Interestingly, a recent report by Coinshares highlighted why Ethereum continues to be an investor favorite and how it has been able to secure record investment inflows. The report said,
“Ethereum was the standout performer with a record US$216m of investment product inflows, beating the previous week record of US$195m. Ethereum inflows represented 36% of the digital asset inflows last week, far greater than the share of assets under management at 16%. This highlights how investors are, at least on a relative basis, favoring Ethereum.”
While it is only a matter of time before Ethereum attains the $2000-valuation, a drastic dip in price will undo all the hard work. However, that seems unlikely, given how strong its network is and the fact that investors are continuing to accumulate despite its relatively high price point.