Ether, the world’s second-largest cryptocurrency by market value, reached the $4,000 level and is up about 20% over the past week, compared with a 2% rise in bitcoin over the same period. Technical charts suggest ETH is poised to continue higher towards the all-time high around $4,300, set on May 12 before a nearly 60% sell-off.
In August, the Ethereum blockchain underwent a hotly anticipated upgrade dubbed the London hard fork. The upgrade contributed to a price breakout above $2,900, which also coincided with a rise in the ETH/BTC ratio above 0.07.
“The quantity of ETH tokens being locked into DeFi is rising. This is placing added pressure on the supply of the cryptoasset as more tokens become essentially unavailable to the market for trading,” Simon Peters, cryptoasset analyst at multi-asset investment platform eToro, wrote in an email to CoinDesk.
“ETH staking is growing. Currently, around 7.2 million ETH are staked, which equates to around 6% of ETH tokens, again limiting supply,” Peters wrote.
The ether price has increased more than fivefold this year, pushing ether’s market capitalization to $471 billion.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.