The Ethereum price has reached a new yearly high after a massive weekend rally that sent most of the crypto market into the green. This rally has put the Ethereum price above the $2,200 level for the first time in 2023, sparking speculations as to what could be behind the price surge.
Ethereum Following The King: Bitcoin
One of the major reasons that the Ethereum price rallied to a new yearly high is the fact that the price of Bitcoin is also on an uptrend. Bitcoin which is benefitting immensely from the hype around a potential Spot Bitcoin ETF approval jumped to its own yearly highs back in November, and after clearing the $40,000 level this year, the leading cryptocurrency pulled up the rest of the market with it.
Interest in Bitcoin has spilled over into cryptocurrencies such as ETH and even though the Bitcoin dominance remains high, it has not stopped altcoins from actually rallying alongside it. There has also been an Ethereum short squeeze, sending over $30 million in shorts into liquidation.
Greed Is on The Rise
As expected, there has been a lot of greed in the market as prices have recovered. This has helped the entrance of new money into the market, pumping the price of Ethereum as well. According to the Crypto Fear & Greed Index, greed levels among crypto investors are at one of the highest levels of the year.
Currently sitting at a score of 74 on the index, it is the closes to extreme greed that it has gotten. However, the fact that the index has not entered the extreme greed territory suggests that the rally might not be over. This is because rallies like these usually come to an end when extreme greed is on the high side.
ETH rises to a new yearly high | Source: ETHUSD on Tradingview.com
Whales Get In on The Action
There has been a lot of activity from Ethereum whales who have been buying up the cryptocurrency in large quantities. Ethereum’s trading volume has jumped significantly, rising 17% in the last day alone to reach $11.4 billion.
With such a significant rise in volume, it points to large investors, not smaller investors, actually leading the charge this time around. As reported by NewsBTC, Ethereum, alongside Bitcoin, has dominated the total crypto trading volume recently.
Ethereum Lagging Behind Bitcoin
Interestingly, while the Ethereum price has mostly followed Bitcoin, it has not seen the same performance that Bitcoin has seen. For example, while Bitcoin hit a new yearly high in November, ETH did not do so until December.
Then looking at the charts, the last time that the Bitcoin price was above $41,000, the Ethereum price was trading at $2,700. However, this time around, ETH is lagging behind and is currently trading at $2,200 compared to Bitcoin’s $41,000.
Nevertheless, Ethereum is still looking quite bullish. Its price is up 3.91% in the last 24 hours to trade at $2,248 at the time of this writing.
Featured image from Forkast News, chart from Tradingview.com