Ethereum price (ETHUSD) has been on an upward trend in the past few months. In the past three months alone, the price has moved up by more than 90%, outperforming bitcoin and gold prices that are up by 30% and 20%, respectively. Let us now look at several reasons that have made ETH the best-performing (major) cryptocurrency in the past few months.
ETH has outperformed BTC and Gold
Monetary and Fiscal Policy
The first major reason why Ethereum price has been surging is because of the overall monetary and fiscal policy in the United States. In recent months the Federal Reserve has brought interest rates to historic lows and printed tons of money through quantitative easing.
At the same time, congress has unleashed the biggest stimulus package on record. And, they are currently negotiating another deal worth more than a trillion dollars.
With all this money flying around, investors have moved to the financial market because of the low real yields. As a result, the rally in Ethereum price is mostly because of the overall exuberance in the market, which has seen other assets like stocks and gold soar.
Fed balance sheet has been surging
ETH 2.0 and DeFi
Another important reason why Ethereum price has been rising is the ongoing roll out of ETH 2.0 and the surging demand for Decentralised Finance (DeFi). As I have written before, developers are currently conducting the biggest upgrade for Ethereum since it was founded. As we speak, thousands of validators are in the Medalla testnet. Each of these validators had to deposit 32 ETH, which shows the enthusiasm in the community.
Meanwhile, Ethereum price is rising because of the rising demand of DeFi, which is a fast-growing sector in fintech. In January, the value of funds in the DeFi ecosystem was more than $1 billion. The recent statistics show that the total value of DeFi transactions has risen to more than $4.4 billion. Most of the companies in the ecosystem offer lending services, DEXes, and assets management.
DeFi transactions have been rising
Dow Jones ended 2.32% higher at 25,595 after the index tested and bounced from the 50-day moving average. The index rejected several times the last two weeks at the 200-day moving average. The short term picture has improved after yesterday’s gains, but the long term outlook remains bearish below the 200-day moving average.
On the upside, first resistance for the Dow index stands at 25,601 the high from yesterday. A move above 25,601 might open the way for a test of 25,027 the high from June 24. If the bulls continue then the next supply zone for the Dow Jones is at 26,274 the 200-day moving average.
On the flip side, immediate support for Dow Jones index is at 25,096 the low from yesterday. Next support for the Dow Jones will be met at 24,952 the 50-day moving average. A break below 24,952 might open the way for a test of 24,755 the 100-day moving average.