Bitcoin often leads the crypto market, but all eyes seem to be on Ethereum at the moment; in the past day, since Monday’s candle open at $142, the second-largest digital asset has rocketed 13% higher, reaching $165 just minutes ago as of the time of this article’s writing.
This is the highest price ETH has traded at since March’s capitulation event, and 86% higher than the $90 bottom established on that day.
This explosive move higher has liquidated over $1.6 million worth of short positions on BitMEX, according to data from derivatives tracker Skew.com, with thousands of dollars more of liquidations being reported each and every minute.
While $1.6 million may not sound like much, it represents a good portion of the exchange’s Ethereum market, which is much less liquid than its Bitcoin counterpart.
With ETH strongly outperforming Bitcoin, many have been wondering what is behind this trend; data shows that there is a confluence of answers.
What’s Behind Ethereum’s Explosive Price Action?
Ethereum’s explosive move can be attributed to a number of market trends:
- Investors are longing ETH: Since the start of the day, U.S. dollar-denominated open interest in the Ethereum contract has risen from $43 million to $67 million now, according to Skew.com data. This indicates that investors are starting to open long positions in response to the move, further pressuring the price higher.
- Ethereum is catching up to Bitcoin: During March 12’s capitulation crash, Ethereum strongly underperformed Bitcoin, falling from $200 to a low of $89 within 24 hours’ time, which was more than 50%. The recent rally is likely ETH catching up to Bitcoin, which has nearly recovered all of the March 12th crash.
- A key technical analysis factor is playing out: Finally, as reported by NewsBTC previously, Ethereum has broken out of an ascending triangle pattern, which more often than not results in further upside for the asset involved. Josh Olszewicz, a prominent cryptocurrency analyst who identified this pattern, explained that the recent breakout gives ETH a target of $200, which could be claimed within the next two days.
Featured Image from Shutterstock