Analysts expect Ethereum’s price to skyrocket due to solid fundamentals

• According to Santiment, ETH trading funds hit a two-year low.
• The total value frozen in the DeFi sector has exceeded the previous all-time high.

---

Over the past 30 days, Ethereum has shown the highest profits in the top 10 by market capitalization with 22.23%. Exceeded only by Bitcoin (40.17%), the price of ETH appears to be driven by two factors: the launch of the deposit agreement for Ethereum 2.0 and the gradual recovery of the DeFi sector. At the time of publication, ETH is trading at $ 460 with a sideways move of -0.17% on the last day.

Surprisingly, the fundamentals are strong for a continuation of the rally. While the price appears to be entering a consolidation phase, data analytics firm Santiment indicate that ETH funds on exchanges hit a two-year low. As the analyst notes, this could indicate a reduction in selling pressure on ETH:

The percentage of the total $ ETH held on exchanges today (13.35%) hasn’t been that low since November 23, 2018. The nearly exact two-year milestone is a positive sign for #Ethereum holders, who have historically benefited when supply has stopped trading is kept low. It indicates that the large odds of whale clearance will remain limited.

In this sense, cryptocurrency trader Josh Rager has set to a $ 482 target. Rager commented that ETH is “slowly grinding to retest the September highs. A break above $ 482 and I will likely be looking at $ 500 + targets for the first time since 2018. “Cryptocurrency entrepreneur and investor Qiao Wang offered another interesting perspective. Via Twitter, he complaints:

I keep seeing more and more reasons why ETH could outperform BTC in the next bull run. Perhaps not on a risk-adjusted return basis, but probably on an absolute return basis.

However, he pointed out that investors could make more profits by diversifying their portfolio into Bitcoin and “blue chips” from the DeFi sector, tokens that offer higher profit yields than ETH. In that sense, him declared:

I think you’ll do pretty well in the next year or so. But if you want to keep your portfolio at institutional standard, you need to consider the possibility that BTC + DeFi is a much better portfolio build. Not financial advice.

Wang also revealed that he owns more ETH than BTC and is considering sending the 32 ETH required for the Eth2 deposit agreement, but is concerned because “the economy doesn’t make much sense”. Other investors have expressed similar concerns. Furthermore, the relationship between an increase in the price of ETH and the incentives to keep the funds in the Eth2 deposit agreement could be inversely proportional.

Investors who send 32 ETH to the deposit agreement must keep it “locked in” for two years to receive the staking rewards or 60% of that time, according to Vitalik Buterin. In a bull market with a steady rise in the price of ETH, investors may be inclined to maintain liquidity and have the freedom to make profits. At the time of publication, enthusiasm for the deposit agreement remained modest. So far only 84,512 ETH have been deposited from the 524,288 ETH required to start phase 0.

Is DeFi Fever Back on Ethereum?

On the other hand, the DeFi Pulse data shows that the total locked value (TVL) in the DeFi sector has reached a new all-time high in the past two days. After a period of stagnation at $ 12 billion, this figure currently stands at $ 13.75 billion.

TVL of major protocols also skyrocketed with Uniswap maintaining its 21.70% dominance and an all-time high of $ 3 billion. UNI’s price had 14% gains in the past 24 hours, outperforming COMP (12.8%) and AAVE (14.7%). In general, the DeFi industry’s hottest tokens have seen strong gains in recent days, which feeds hopes for further flourishing of the DeFi industry.