Ethereum (ETH) Inches to $200, Will Altcoins Follow?
The ETH market price reawakened on Monday, outpacing other assets, but expectations of a more significant rally are still cautious.
The market price of Ethereum (ETH) reawakened after a long period of stagnancy. ETH traded at $194.48, within earshot of the $200 level, with volumes climbing above $6.7 billion’s equivalent in 24 hours.
The Ethereum network has the benefit of carrying Tether (USDT), the leading stablecoin. More than 1.9 billion USDT were minted on the network. This led to an increase in average transaction fees in the past two weeks. ETH transfer fees doubled in the past two weeks.
At the same time, Bitcoin (BTC) fees have fallen, leading analysts to predict a “flippening” of fee structures. But slightly higher fees are not entirely bad for the Ethereum network, as they add a boost to miners’ rewards, which are at a record low. With no certain launch date of profitable staking, Ethereum is still attractive for its block reward and the transaction fees.
The recent behavior of ETH is also seen as a potential signal of an upcoming altcoin rally. However, altcoins remain highly volatile. ETH is also getting a boost from being used as collateral in multiple Decentralized Finance (DeFi) structures, such as the Maker DAO (MKR) and Compound.
The direction of ETH trading in the short term, however, remains uncertain. Some of the influence comes from the BitMex futures market, with the potential to unleash a larger rally for ETH:
The current ETH rally happens on a mix of trades on a series of lesser-known exchanges. ETH now sees more than 45% of its volumes against USDT, managing to decouple somewhat from BTC. But the ETH/BTC pair is also showing a reversal of the BTC dominance. With the leading coin stuck around $10,000 in the past months, altcoins may attempt separate rallies, boosted by demand for higher returns.
ETH has been known for significant volatility. Following the freeze of the ICO trend, ETH fell from the $400 range toward its current price. Now, ETH will seek direction again, possibly receiving a boost from DeFi and from carrying more of the supply of USDT.
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