Altcoin price action has been the talk of the town for the past two weeks — and for good reason. Since the start of 2020, altcoins like Icon (ICX), AION and WanChain (WAN) have surged more than 200%, 120% and 60% respectively, leading some analysts to suggest that a new altcoin season has begun.
Crypto market daily price chart. Source: Coin360
Now, Ether (ETH) appears to have joined the party, and since the altcoin dropped to $115.95 on Dec. 18, 2018, it has quietly rallied 90% to reach a 2020 high at $220.81 on Feb. 6.
As the crypto market rallied, the amount of Ether and locked-in decentralized finance platforms has also risen. In fact, recently released data from data provider DeFi Pulse revealed that the total value of assets locked in DeFi platforms has risen to $1.01 billion.
Currently, 3.135 million Ether are locked up in DeFi platforms, a slight decline from the Feb. 2 figure of 3.195 million.
Total Value Locked (USD) in DeFi. Source: DeFi Pulse
Since 2019, the value of assets locked up in the DeFi ecosystem has risen from $240 million to $1.01 billion, and analysts believe that the growth in popularity and number of assets staked across DeFi platforms will increase demand for Ether and support a steady rise in the altcoin’s price.
Miners are accumulating Ether
Another bullish signal for Ether is the growth in the number of miners holding Ether. Maksim Balashevich, the founder of on-chain analytics data provider Santiment, recently broke the phenomenon down by explaining that:
“Across the entire Ethereum miner ecosystem, the last three months were marked by stable and undisrupted accumulation.”
ETH Miner Balances Over Time. Source: Santiment.net
According to Balashevich, the total balance of all Ether mining pools currently stands near an all-time high of 1.69 million Ether ($300 million) and the current accumulation period leads Balashevich to believe that there are “high confidence levels in the project among the majority of block creators, at the very least relative to the current market conditions.”
Investors are bullish as ETH 2.0 approaches
The projected July 2020 launch of ETH 2.0 is another bullish factor for Ether’s price. During a Feb. 6 “Ask Me Anything” session on Reddit with Ethereum network developers, the ETH 2.0 team explained that the network upgrade will not go live until three clients can safely operate testnets for at least eight weeks.
During the session, ETH 2.0 researcher Justin Drake said, “I have 95% confidence we will launch in 2020.” ETH 2.0 will transition the network from proof-of-work to proof-of-stake, and instead of maintaining mining rigs, block validators will be required to stake 32 ETH in order to stake on the network.
The network upgrade could have the early impact of increasing demand for ETH, and it’s possible that miners and investors looking to gain a 5% to 18% staking reward could be accumulating ETH and in anticipation of the ETH 2.0 launch.
From a technical analysis perspective, Ether’s price has made notable strides by breaking through crucial resistance levels over the past two weeks.
ETH/USD broke a key long-term resistance
On Jan. 30, Ether price finally crossed above the 200-day moving average, and a stiff resistance at $179. The altcoin has since rallied 27% since then, and many analysts believe the digital asset is now well-positioned to make a run at $240 conservatively and $300 over the coming months if the crypto market sentiment remains bullish.
ETH/USD daily chart. Source: TradingView
Currently, traders are maintaining purchasing volume, and the three white soldiers candlestick pattern that began on Feb. 5 suggests further continuation to the upside but the shorter time frame shows Ether price looking a bit toppy and losing momentum.
Should Bitcoin price correct over the coming days, investors could see Ether give up some gains and pull back to $200 where the moving average of the Bollinger Band indicator is currently positioned.
ETH/USD six-hour chart. Source: TradingView
Below this, the price could drop to $193 where there is support. The relative strength index is in the overbought region on the daily time frame and the six-hour time frame shows the indicator beginning to roll over. The same can be said for the Moving Average Convergence Divergence histogram, where the lightening shade of the histogram candles shows a slowdown in buying.
Ultimately, as the Bitcoin price continues to push higher toward $10,000, Ether’s price is likely to follow by moving higher. Traders are encouraged to keep an eye on trading volume and watch the RSI and MACD in order to determine whether or not the asset has become “too” overbought.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.