According to Elias Simos, a senior analyst at Decentral Park Capital, Ethereum for the first time since May recorded a net outflow of currency exchange after the recovery of the cryptocurrency market and Ethereum prices.
Over the past week, $ ETH printed consistent exchange net outflows for * only * the 3rd time in 2019.
Someone has been shopping🛒🛒🛒 pic.twitter.com/GmNKr7LLHF
- Elias Simos (@eliasimos) September 16, 2019
A net outflow of funds means that investors withdraw funds from the cryptocurrency exchange either to personal wallets, such as a no-deposit wallet, or to a cold wallet for safe storage of assets in the long term.
Often, a net outflow to cryptocurrency exchanges for assets such as ETHoccurs when investor confidence in the short- and medium-term trend of an asset grows.
From September 1 in less than three weeks, the price of Ethereum rose from 165 to 217 dollars at its weekly peak, by more than 31 percent against the US dollar.
Why Ethereum Price Rises Strongly Against BTC and USD
According to Ethereum analysts, including Anthony Sassano, Set Protocol's product marketing manager, the Ethereum blockchain protocol has seen an overall increase in usage in recent months.
On September 16, the Ethereum network processed record high activity in its protocol in the form of transactions and smart contracts, which indicates that, despite the 85-percent decrease compared to its historical maximum, the use of ETH is constantly increasing.
Yesterday, the Ethereum network processed the most activity in its history. pic.twitter.com/gWxkEad6z7
- Eric Conner (@econoar) September 17, 2019
Sassano said:
“Ethereum has turned Bitcoin upside down in daily fees. Do you know what's even more striking about this image? The fees paid on other blockchains don't even come close to Bitcoin & Ethereum, which signals to me that there is little demand for these platforms. "
The strong short-term trend of ETH is supported by fundamental factors, such as increased network usage and daily payments, but, as they say, the main catalyst for the jump in Ethereum prices was its sharp decline in the middle of the 2019 year.
At its lowest level in 2019, the price of Ethereum fell to 80 dollars on regulated cryptocurrency exchanges, fluctuating in the low 100 range for the first two quarters of the year.
A drop in 93% from a record high of 1448 dollars. To a region with low 100 dollars. It led to the fact that the price of Ethereum showed oversold.
When the price of Ethereum recovered above 190 dollars, which became a rather difficult level of resistance for cryptocurrency, it quickly made its way to establish a monthly maximum.
Other potential factors
Ethereum expects to release its version of 2.0 in 2020, and expectations for increased scalability to provide a more practical environment for both developers and users are growing.
At the Ethereal conference, Ethereum co-founder Vitalik Buterin сказал:
“[Version 2.0 step one] is complete except for cases that arise during security checks. Clients are now talking to each other. The next step is to make sure they can support the public web at scale.
The next step is to make sure they can support the public web at scale. We are talking about potentially hundreds of thousands of validators aggregating a huge number of transactions.”
Users' expectations for the release of 2.0, a marked increase in network usage and a recovery in Ethereum prices compared to an important level of resistance are likely to fuel the short-term momentum of the cryptocurrency.