Ethereum
$2,992.88 -2.20%
ETH · 6d

2 key Ethereum price metrics back traders’ confidence in $3,800 ETH

According to derivatives markets, Ether (ETH) traders are still confident that there is the chance formore upside even though the 23% correction on Sept. 7 took a hit on prices. 

Ethereum network congestion also peaked on Sept. 7 when the average transaction fee reached $60, and since then it has remained above $17. As a result of the lingering challenges experienced by the network, investors have shifted into Ethereum competitors with bridge and layer-two capabilities. For example, Polkadot’s DOT rose by 29% over the past week and Algorand’s ALGO spiked 67%.

Undoubtedly, there’s a quest for interoperability and layer-two scaling solutions, aiming to quickly meet the explosive demand for nonfungible tokens (NFTs) and decentralized finance (DeFi) applications.

Whether the Ethereum network will sustain its absolute leadership position seems irrelevant right now, as the industry’s net value locked (adjusted total value locked) in smart contracts has risen from $13.6 billion in December 2020 to its current $82 billion.

Regulatory fear coming from the United States is likely curbing investors’ optimism in cryptocurrencies. According to a document released by a House committee on Sept. 13, lawmakers aim to close a loophole that previously allowed investors to claim capital gains deductions. The Internal Revenue Service currently considers cryptocurrencies as property in “wash sales,” and as a result, they are exempted from 30-day repurchase rules.

Ether price on Bistamp in USD. Source: TradingView

The brief $4,000 test on Sept. 3 momentarily caused derivatives markets to enter overdrive. The nonstop 45-day long rally had raised Ether’s price from $1,735 on July 20, a 130% increase. Meanwhile, the $3,200 support held firmly and boosted bulls’ confidence even though the altcoin dropped by 16% in eight days.

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