Ethereum Locked within DeFi Keeps Surging – Is this a Good Sign for its Price?
The price of ETH experienced certain remarkable upwards momentum today, following a long time of trading on the sideways that was caused by the decline in its price to lows of $120 in the previous week.
This time in which the price is consolidating seems to be leading to a move to the upside, which may support the idea that the lows of ETH in recent times will highlight a long-term bottom.
If the momentum keeps holding well in the near-term, any likely rally may be further influenced by the continuous locking of a remarkable amount of ETH into DeFi platforms. Such action has brought about a lower circulating supply.
At press time, the price of Ethereum is trading under 4 percent at $132.50, marking a remarkable surge from its daily lows of $128 established in the previous day just before the upsurge recorded in the entire market when the price of BTC attained $7,450.
Within one week, ETH was able to exhibit a remarkable move from its recent lows of $120 established during the capitulatory downturn observed in the market. This, its powerful bounce from this level and its sustained upwards momentum could be pointing to a long-term bottom.
BTC needs to surge over the hurdle existing at $7500 area for ETH to maintain this newfound momentum. This is because a surge over this level could bring about a huge rally that enables leading altcoins such as ETH to likewise surge.
A renowned cryptocurrency analyst known as Hsaka on Twitter explained the following recently.
There is the EQ/breaker retest. Trading midrange is always a little dicey, I didn't pull trigger on this one, still riding my $ETH long.
At HTF resistance on BTC, I saw a lot of people talking about shorting this area. I see a 3D SFP and bullish engulfing, $8k+ likely IMO. pic.twitter.com/Vll4scMcZx
— Mayne (@Tradermayne) December 22, 2019
With the DeFi trend sweeping across the crypto markets, it could make ETH bullish in the long-term, due to a remarkable amount of ETH being locked up.
Data from Defipulse.com shows that not up to $680 million worth of ETH is currently locked in various DeFi initiatives, which improves the scarcity of the crypto by bringing down the circulating supply.
As the number keeps growing in the coming months, the DeFi trend may improve the fundamental strength of ETH and boost any bullish move that comes up in the near-term.
Featured image courtesy of Shutterstock. Source: CryptoPress.