Ethereum’s ether, the second-largest cryptocurrency by market cap, has recently seen its price surge over 18% in 24 hours, which helped it get past the $200 mark after hitting yearly lows.
According to CryptoCompare data the cryptocurrency managed to go over its 50-day SMA after it started recovering from a $167 low, at a time in which most top cryptocurrencies are in the green.
Ether’s price has been recovering amid a plethora of developments. As CryptoGlobe covered, cryptocurrency exchange Gemini launched a dollar-backed stablecoin on Ethereum called Gemini Dollar (USD). Its move was followed by the launch of the Paxos Standard (PAX), another stablecoin on ETH.
The cryptocurrency’s co-founder Vitalik Buterin has also recently added to a comment where he stated the cryptocurrency ecosystem’s explosive growth days are over. As reported, Buterin now noted that 1000x gains in crypto adoption and real-world usage “are very much possible.”
Moreover Mark W. Yusko, the CEO of Morgan Creek, has recently said he’s bullish on Ethereum’s future, despite its dramatic price drop this month. Per Yusko, the crypto is currently comparable to Google in 1993 or 1994. Per his words “Ethereum is different, think of it as the World Wide Web of the TrustNet.”
The cryptocurrency’s price dropped due to a number of factors, which included pressure from short sellers, and projects that raised funds through initial coin offerings (ICOs) on its network dumping some of the funds in their war chests.
Notably, ICO projects have spent over $100 million worth of the cryptocurrency in the last 30 days, as reported. Although “spent” on the data source Santiment doesn’t necessarily mean the projects sold their funds, it’s plausible some did. Available data shows over 150,000 ETH had been spent last week, shortly before its price dropped.
Ether shorts on popular cryptocurrency exchange Bitfinex, have meanwhile kept on mounting, as traders seemingly believe the cryptocurrency’s 18% move could be a dead cat bounce. As analyst Alex Kruger pointed out on Twitter, shorts fell for a brief period of time but quickly came back to an all-time high.
Short selling is essentially betting against an asset. Some analysts believe the outstanding short interest on ETH has been caused by derivatives exchange BitMEX, as they argue its ETHUSD contracts favor those who short the cryptocurrency.
In subsequent tweets Kruger noted that ether’s extreme volume shows there’s exhaustion in the market, which is forming a temporary bottom. The cryptocurrency, in his opinion, may still drop further as the “fundamentals call for further downside.”
Bitcoin, the flagship cryptocurrency, has seen its price rise 3.33% in the last 24-hour period, as it’s trading at $6,480 at press time. Other cryptocurrencies that recorded daily gains above 10% include Dash, Zcash, Litecoin, and TRX, and Nano.