Ethereum grew in terms of market cap dominance despite volatility in the sector. Interest in betting increased and traders became bullish.
Ethereum is a decentralized open-source Blockchain system that includes its own cryptocurrency, Ether. ETH functions as a platform for numerous other cryptocurrencies, as well as for the execution of decentralized smart contracts.
Throughout the second quarter of 2023, Ethereum [ETH] experienced significant fluctuations and high volatility. Despite these challenges, the Ethereum network showed resilience and continued to attract an influx of new users to its protocol. In particular, the platform showed substantial growth in various aspects during this period.
A Demonstration of Mastery
According to Messari data, the central issue that dominated the short-term narrative around Ethereum was regulation. The SEC’s actions against major exchanges such as Coinbase and Binance raised concerns about the classification of the assets as securities. Despite these challenges, ETH managed to increase its dominance in the market.
However, there is hope that with Markets in Crypto Assets (MiCA) in Europe, Ethereum’s market cap dominance will further increase, as adoption begins to rise.
MiCA is part of a broader EU package aimed at updating the bloc’s approach to various digital financial aspects and focuses primarily on crypto asset providers, as well as the obligations they must declare.
ETH’s strong tokenomics also played a critical role in driving its performance. Base fee burn saw a substantial 58% increase during the quarter, leading to approximately 380,000 ETH being burned.
Said mechanism helped reduce the overall supply of ETH, adding scarcity and possible upward pressure on prices. Furthermore, net ETH burned also witnessed a notable triple increase, going from around 80,000 to around 230,000.
Bet till You Make It
The rise in gasoline prices, fueled by the hype surrounding PEPE, was the driving force behind the biggest ETH burn. As a result, validators saw their real returns rise to an impressive 6.1%.
Such an increase in yields, coupled with the unlocking of staking, naturally drew more flows into staking contracts. May and June saw the highest net flows ever, at 3 million and 1.9 million ETH respectively, further contributing to growth and stake share in the Ethereum network.
In addition, the number of validators on the Ethereum network also increased. According to Staking Rewards data, the number of validators on the Ethereum network grew by 8.81% over the past month.
Due to these factors, traders were feeling optimistic about the future of ETH. This was indicated by the decline in the put-to-call ratio for ETH, which recently showed that the number of calls exceeded the number of puts.
Ether Price Analysis
The long tail of the Ether candle ETH from July 17-18 shows that the bulls are buying the dips to the 50-day SMA of $1,853.
This suggests that the ETH/USDT pair could remain stuck between the 50-day SMA and $2,000 for a while longer. One small bright spot for the bulls is that the 20-day EMA ($1,898) is gradually sloping higher and the RSI is in the positive territory. If the buyers catapult the price above $2,000, the pair could start the next leg higher towards $2,141.
Ethereum (ETH) is trading today, July 20, at US$1,916.91, according to the Live Coin Watch portal. This price positions it at 1.0% compared to its value 24 hours ago and 1.02% compared to the same day last week. The current domain (market price) of the token is US$227,920,688,802.
By Audy Castaneda
