Ether (ETH), the second-largest cryptocurrency by market value, jumped to two-year highs on Tuesday, taking its year-to-date gains to 260%.

  • The native cryptocurrency of the Ethereum blockchain, ETH was trading at $470 at press time – a level last seen in July 2018.
  • Prices are up more than 100% this quarter alone, according to CoinDesk's ether price index.
  • As ether rose by 10% in the past 24 hours, bitcoin added 3% and is currently trading near $11,940.
  • Other prominent coins from the CoinDesk 20 including XRP, Stellar XLM, litecoin, bitcoin cash and Chainlink's link token have all rallied by 2%-5% in the past 24 hours.
Ether price chart
Source: CoinDesk
  • "Ethereum's price increase shows it is one of the main altcoins leading the market," Simon Peters, an analyst at multi-asset investment platform eToro, told CoinDesk in an email.
  • Investors may be entering the crypto market via ether and decentralized finance protocols rather than bitcoin, which served as a gateway to crypto markets during the 2017 bull run, Peters said.
  • On-chain metrics suggest ether's price rally has legs.
  • To start with, exchange deposits – the number of coins held in exchange addresses – declined to 17.99 million ETH on Monday, the lowest level since March 11, according to data source Glassnode.
Exchange balances for ETH
Source: Glassnode
  • Exchange balances have also reduced by over 5% in the past four weeks.
  • "Investors are holding onto ether as a value holder during times when inflation is on the rise," Glassnode tweeted
  • Investors typically move coins off exchanges to their own wallets when they expect prices to rally.
  • Additionally, the recent price gains look to have been fueled by strong hands.
  • "The top 100 non-exchange addresses have increased bags by +8.2% in just 35 days – a bullish sign," blockchain analytics firm Santiment tweeted Monday.
  • The options market, too, is biased bullish on ether with the one-, three- and six-month put-call skews hovering below zero, according to data provided by the crypto derivatives research firm Skew.
  • That's a sign of call options, or bullish bets, drawing higher prices than puts, or bearish bets.
Ether put-call skew
Source: Skew
  • Put-call skews have declined sharply today with ether's rise to fresh two-year highs above $450.
  • Markets now expect ether to face increased volatility over the next four weeks, with one-month implied volatility increasing from 77% to 91% early Tuesday.

Also read: First Mover: Ether Price Swings Make Bitcoin Look Tame as DeFi Speculation Spreads

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