The ethereum price, which was on its longest winning streak in 2020, recently plummeted as the broad cryptocurrency market corrected. With a massive $112 million ETH options contract expiry expected this coming Friday, some investors are bracing for a bigger pullback.
However, Weiss Crypto Ratings noted that ETH is poised to print new record highs, emphasizing that traders remain overtly bullish on the second-largest cryptocurrency.
Pullback Done, Huge Rally Next
Just days ago, the bitcoin price recorded a significant drop to the $11,300 region. This slip saw other cryptocurrencies like ethereum also slip below crucial support areas. After hovering above $400 for several days, ETH dropped to sub-$380. Nonetheless, traders are unfazed by the pullback.
In a tweet on August 25, US-based economic research agency Weiss Ratings postulated that ethereum had been overheated and was essentially due for a pullback. Weiss argued that the cryptocurrency is now aiming for new heights now that a correction was witnessed. ETH is trading around the $383.42 mark at the time of writing after gaining 0.21 points in the last 24 hours.
Fundamental Indicators Also Looking Good
Despite ETH’s price stalling in recent days, the DeFi sector has seen meteoric growth. According to data provided by DeFi Pulse, the total value locked in DeFi protocols recently skyrocketed past $7 billion for the first time ever.
Aave is currently the largest DeFi protocol with $1.51 billion in assets currently locked in. Aave’s exponential growth over the past few days comes after the lending platform was granted an Electronic Money Institution (EMI) license by the UK Financial Conduct Authority (FCA). The Aave protocol is followed by MakerDAO which has $1.42 billion locked in.
Besides the DeFi front, experts believe ETH’s on-chain fundamentals are stronger than ever. Placeholder Capital partner Chris Burniske, for instance, posited that ethereum’s robust “on-chain economies” and the mainstream’s perception of the crypto-asset may trigger an insane rally:
“Meanwhile, to the mainstream $ETH will be the new kid on the block — expect a frenzy to go with that realization. Given $ETH’s outperformance of $BTC over its lifetime (chart below again), not to mention smaller network value and strong on-chain economies, I see every reason for $ETHBTC to surpass ATHs.”
The blossoming DeFi and on-chain economies could be setting ethereum up to surpass its previous highs in the near future.