Crypto News

Ethereum Just Surpassed $500 For First Time Since 2018—Key Reasons Why

The price of Ethereum (ETH) hit $500 on Binance for the first time since July 2018. The timing of the ETH rally is noteworthy because it comes merely two days after it dropped to $456.

Within two days, from its lowest point on November 18, ETH has rallied by nearly 10%.

Several key reasons appear to be buying the sentiment around Ethereum. The main two reasons are likely the resurgence of decentralized finance (DeFi) and the imminence of ETH 2.0.

The 4-hour price chart of Ethereum. Source: ETHUSD on

DeFi Recovery and ETH 2.0 Fuel Ethereum Rally

In the past week, major DeFi tokens in the likes of (YFI) and Aave posted large gains against both ETH and the U.S. dollar.

Following a capitulation-esqe drop, the recovery of DeFi tokens likely boosted the market sentiment around Ethereum and the altcoin market, in general.

Atop the rebound of DeFi tokens, the impending ETH 2.0 mainnet release has investors optimistic around Ethereum.

Especially as Ethereum heads towards the deadline of the eth2 deposit contract by the month’s end, the supply of ETH on exchanges would likely drop.

When the circulating supply of ETH on exchanges continuously declines, the sell-side pressure on the cryptocurrency could also drop in tandem.

Investors are Uncertain Whether to Choose Bitcoin, Ethereum, or DeFi

Based on the recent trend of the market, investors are seemingly bracing for a prolonged bull market heading into the year’s end.

According to Spencer Noon, the head of DTCCapital, investors are uncertain whether to choose between Bitcoin, Ethereum, or DeFi. He wrote:

“Behind the scenes, very few investors I’ve talked to have conviction about whether $BTC, $ETH, or #DeFi tokens outperform this bull market. I don’t blame them for having 1/3 exposure to each, which seems reasonable given the uncertainty.”

This uncertainty could benefit Ethereum as Bitcoin has rallied significantly in recent months. It is already nearing $20,000, and some may think that its upside potential is limited until it passes $20,000.

If Bitcoin achieves a new all-time high, it would enter price discovery, which would lead to a new peak for the dominant cryptocurrency.

Until BTC reaches a new record high, the probability that the appetite for DeFi and ETH would strengthen remains high.

How useful was this post?

Click on a star to rate it!

As you found this post useful...

Follow us on social media!

Inline Feedbacks
View all comments

Related Crypto News

Justice Department extradites alleged BTC mining Ponzi operator from Panama
AirBit Club’s leadership has been gathered in New York City and will face charges for stealing “membership dues” to...
Can DeFi indices finally make crypto-based passive investing worthwhile?
The concept of a DeFi ETF sounds promising, but it’s not without pitfalls. Index investing in the stock market...
Bitcoin theft is likely to surge in meager post-COVID economy: report
Cybercriminals may favor a different cryptocurrency in the coming months, however. Cryptocurrency-related fraud and theft are likely to grow...
Bitcoin Explodes to Fresh All-Time High; Here’s What Could Come Next
Following what is described as an “epic bear trap” to $16,400, Bitcoin has officially set a fresh all-time high....
XRP price now eyeing $1.00 after key support level holds, BTC price soars
XRP price must break a key resistance level before $1.00 becomes a real possibility. While Bitcoin (BTC) is facing...
Bitcoin Crushes Previous All-Time Price Highs Surpassing 2017’s Bull Run
Digital currency markets are on a tear this week, as a myriad of crypto assets have seen enormous gains...

Featured Crypto News

Bitcoin Begins to Correct Below $17,000: Where Traders Say BTC is Heading
The price of Bitcoin has begun its correction below $17,000, resuming the bearish downtrend from yesterday. Traders have mixed...
Wallets with less than 1 BTC account for just 5% of Bitcoin’s market cap
With the number of “wholecoiner” Bitcoin wallets holding at least 1 BTC increasing every year, the remaining addresses represent...
Stack Funds hails Bitcoin's 'healthy correction' predicts ‘euphoria’ ahead
Bitcoin could surge towards $100,000 next year following yesterday’s “healthy pullback”, with market psychology currently in the “belief” stage...
Bitcoin Indicator Reaches Historical Extreme: Price Sheds Two Thirds Upon Reversal
Bitcoin price this week reached a high of $19,500, following a six-week, 60% rally. From the moment the first-ever...
Record $7.4B Bitcoin futures open interest shows pros still expect $20K BTC
Bitcoin price fell short of reaching $20,000, but record high open interest on BTC futures shows pros are still...
Mike Novogratz: Everyone Should Put 2% to 3% of Their Net Worth in Bitcoin
Bitcoin bull and Galaxy Digital CEO, Mike Novogratz, says bitcoin is for everyone. He argues that those committing 2%...