Ethereum (ETH), the world’s second-largest cryptocurrency by market capitalization, has started the week by strongly climbing above $3,500 for the first time since January 2022. This marks a 3% gain in the last 24 hours and a 15% increase over the past week.
The bullish sentiment surrounding Ethereum can be partly attributed to the upcoming Dencun upgrade scheduled for March 13. This significant network upgrade is expected to introduce proto-danksharding that promises to make transactions on the Ethereum network faster and cheaper. Also, Ethereum benefits from a strong network effect with the most developers and applications in the Smart Contract Platforms Crypto Sector.
Investor confidence in Ethereum is spilling over into the Decentralized Finance (DeFi) ecosystem. The total value locked (TVL) in DeFi protocols has reached $95 billion, one of the highest levels since the TerraUSD crash in May 2022.
This suggests that investors are once again comfortable putting their money into DeFi projects built on top of Ethereum. As reported earlier, the DeFi sector experienced a significant resurgence with TVL surging past $137 billion, a remarkable recovery from the lows witnessed during the 2022 bear market.
Data from blockchain analytics firm IntoTheBlock (ITB) suggests a strong overall sentiment among ETH holders. It indicates that a significant majority of 91.30% of tracked ETH addresses are currently “in the money” which means their average purchase price (cost basis) is lower than the current market price of ETH. This suggests that a large portion of ETH investors have experienced profits on their holdings.
Additionally, another set of data by IntoTheBlock highlights a mix of profit-taking and holdings at a loss for ETH addresses that bought between $2,980.12 and $4,035.42. It indicates that 7.39% of the total ETH acquired within this cost basis range is currently profitable for investors.
The technical analysis chart shows positive signs for Ethereum as the price has broken above several key resistance levels including the 50% and 76.4% Fibonacci retracement levels. There is also a bullish trend line forming on the hourly chart.
