Wed. Feb 24th, 2021

Ethereum price analysis: what has been happening so far in 2021?

Ethereum, the second-largest coin in the crypto industry, has made a major leap forward in price over the course of the last three weeks. Since 2021 began, ETH has been surging up strongly, breaching the $1,400 level and reaching a new all-time high.ETH price analysis shows that the coin was trading sideways at the end of 2020, with its price fluctuating between $550 and $750. After being stuck between these two levels for some time, it started seeing strong growth on January 3. After reaching $1,330 by January 10, the coin’s price dropped back below $1,000 briefly, but its correction was stopped by a support at $900. 

After that, ETH started its recovery, although its progression was slow and it did encounter a number of resistances along the way. Our Ethereum price analysis for January 2021 shows that the coin had the biggest issue with breaching the $1,250 mark again, as it struggled to do so from January 14 until January 19. It constantly tried to go beyond this level during these five days, and it even managed to do so once or twice.

Unfortunately, it was always rejected before it could stabilise above it. On January 19, the coin finally surged past the resistance, hitting a new record high of $1,432. This marked the first time since early 2018 that Ethereum has been past $1,400, and the new all-time high that the coin now needs to outperform in order to set up its next record.However, breaching the $1,400 mark had similar consequences as the coin’s former surge, causing the price to be rejected. But, this time, it did not go that far down. In fact, the previous resistance at $1,250 served as a support that allowed ETH to bounce back up to $1,363, before another correction followed.

The correction is still ongoing, with the coin at time of writing sitting at $1,318 – nearly three per cent lower than 24 hours previous. Still, on a weekly basis, the coin is around 17 per cent higher than it used to be, with its market cap currently at $149.5bn. The coin’s daily volume is slightly lower than it was 24 hours ago, too. It sits at $45.3bn at time of writing, which is around 1.61 per cent lower than 24 hours before this reading.

Ethereum in 2021: what has been happening with the project?

Back in December 2020, Ethereum finally started its long-expected shift towards Ethereum 2.0. Phase 0 was completed successfully before that, as the coin’s team launched a deposit contract that the community filled with ETH, reaching the necessary amount to start the rest of the process.

The shift towards ETH 2.0 officially started on December 1, 2020, promising a lot for the future of Ethereum, which undoubtedly helped the coin’s price to soar. Ethereum’s DeFi sector, which originally exploded in 2020, continues to grow without pause in 2021. Only yesterday, the decentralised finance sector hit a new all-time high of its own, reaching $25bn in total value locked (TVL). Since then, the coin’s price started seeing a correction, while the DeFi TVL dropped by $1bn sitting at $24.03bn at the time of writing.

But, similar drops have been recorded before, and the TVL will likely recover and continue to grow in days to come.Another major announcement came yesterday from Deribit, which revealed that ETH options open interest also hit an all-time high of $1.8bn notional. According to the exchange, this is around 89 per cent of the total ETH options market.Meanwhile, the confidence in Ethereum 2.0 appears to be growing, as it has been only seven weeks since the launch of the Ethereum 2.0 beacon chain, and so far, the mentioned ETH deposit contract has already collected 2.25 million ETH. Not only that, but the number of validators has increased to 66,360 as the coin continues its transition from Proof-of-Work to Proof-of-Stake. The Ethereum Foundation’s researcher, Danny Ryan, also published a new post recently under the title “The State of ETH 2” In the post, he looked back on all the progress achieved in 2020, but he also let out a few hints for things to come in days to come.

Other recent reports have revealed that Ethereum is now processing 28 per cent more transactions than Bitcoin. However, Ethereum also got a new rival in Near Protocol (NEAR), which was reported to have surged up by 106 per cent as the DeFi sector started to heat up.

Where is Ethereum going next?

 Ethereum price January 2021 outlook also includes possibilities for the coin’s future. Despite ETH struggling to grow and barely reaching a new all-time high, many are optimistic about the cryptocurrency. The first reason for this is, of course, its ongoing transition to Ethereum 2.0. Then, there is the surging DeFi sector which continues to grow, attracting more developers, users and money. DeFi is still strongest on Ethereum, with most projects currently being developed on the network.

Lastly, it is also worth noting that Bitcoin is consolidating with low volatility, which is typically a signal for the beginning of ‘altseason,’ as the crypto community has taken to calling it. All of this has led many to give rather positive price predictions for Ethereum, with plenty of claims that the coin’s own price surge is long overdue. After all, Bitcoin has more than doubled its own price, and Ethereum usually sees a rally about a month after the world’s first cryptocurrency.