by Dencun upgrade, anticipation of spot ETFs, and the broader market’s expansion significantly strengthen Ethereum’s optimistic outlook in February.
Ethereum’s native token, Ether
ETH
tickers down
$2,483
, has experienced a notable surge this week, climbing approximately 12%, including an upside
move of 1.5% today. This upward trajectory has propelled Ether’s value to $2,540, marking its highest price point since Jan. 19.
Several factors contribute to Ethereum’s price movements, from technical upgrades
and market sentiment to broader economic indicators. Let’s delve into the reasons behind Ether’s price increase in recent days.
Bullish market sentiment
Ether’s gains today and this week come in tandem with broader crypto market trends. For instance, Bitcoin
BTC
tickers down
$47,947
comprises over 50% of the total crypto market capitalization and has grown by more than 15% week-to-date to around $48,600.
Crypto traders have turned bullish on two key factors.
First, the newly approved Bitcoin exchange-traded funds (ETFs) have attracted $10 billion
in capital in a month, signifying a growing institutional interest in crypto investment vehicles.
Second, risk sentiment among traders has notably improved following Federal Reserve Chairman
Jerome Powell’s recent interview on 60 Minutes. In the discussion,
Powell hinted at the possibility of reducing interest rates later in the year, sparking optimism in the crypto markets.
Ether and other top-ranking cryptocurrencies typically trade in sync with Bitcoin.
As of Feb. 11, the daily correlation coefficient between ETH and BTC was 0.96, underscoring why Ether was lifted by Bitcoin’s rising tide.
This strong statistical relationship highlights the interconnected nature of the cryptocurrency
market and sheds light on Ether’s significant rally in recent times, aligning closely with Bitcoin’s performance trends.
Dencun upgrade
Ethereum is on the brink of several technological upgrades, most notably the upcoming Dencun
upgrade. Scheduled for March 13, this upgrade aims to improve network efficiency and Layer-2 support, introducing key scalability enhancements.
Historically, Ether prices have reacted positively ahead of key network upgrades.
For instance, the cryptocurrency jumped 100% ahead of the Merge upgrade in September 2022.
Similarly, it swelled approximately 95% ahead of the London Hard Fork in August 2021.
