On July 26, the performance of digital currency market encouraged a lot of traders, becoming the seventh rising day since the 20th of this month. Among them, Ethereum, which ranks second in market value, is particularly prominent and has regained its position as high as $300.
The latest quotation of Ethereum was US$315.9 per coin, an increase of 11.49% within the last 24 hours. At the same time, the turnover was 20.842 million, and the turnover rate was 18.43%; the current circulating market value was 35 billion USD, accounting for 11.43% of the entire cryptocurrency market.
The data shows that Ethereum is not alone. Among the top 20 currencies by market capitalization, only USDT experienced a slight decline of 0.14% due to its special market attributes, and other currencies experienced a relatively large increase. In addition to Ethereum, price of Bitcoin and other cryptocurrencies have all increased by more than 5% in the past 24 hours.
As for the reason for this round of price increase, at least it is the result of the joint action of international policies, capital promotion, market demand and other factors such as:
First, the recent DeFi concept is unprecedentedly popular, and projects with amazing returns that often appear in the industry have gathered investors' attention. Among them, most of the projects are based on Ethereum. What’s more, the 0.12.2 version of the Ethereum 2.0 technical specification has just been released. This may be the main reason why Ethereum can lead the entire cryptocurrency market at this time;
Second, when the US Federal Court handled a case last week, it defined Bitcoin as a kind of "currency" covered by the "Money Transmitter Act" in Washington, DC (currency is usually a means of exchange, payment or storage of value and bitcoin is one of these things) so the attention of virtual currency has been raised sharply;
Third, during the pandemic, central banks of various countries have successively released a lot of currencies, which has previously promoted a substantial rise in the stock market. After the close of last week, the stock market seems to have delivered a potential signal of peace, and the overflow of funds is likely to flow into the cryptocurrency market. The cryptocurrency market is inherently small and extremely sensitive to funds, and the price naturally rises when external funds flow in and;
Finally, the cryptocurrency market has been sluggish for a long time, and the investment community has relatively strong demand for an uptrend market. As we all know, due to the third Bitcoin halving event in 2020, investors inside and outside the industry have been placing high hopes.
However, due to the impact of the pandemic in the first half of the year, the big bull market did not appear as expected. With Ethereum as the "early bird", the long-repressed market sentiment was finally ignited which led to a collective surge.
Can this continue?
Although the recent growth has given a lot of confidence to the industry participants and traders, it is still too early to say that the market is on its way back to the 2017 peak.
The uncertainty caused by the global epidemic has not ended. It’s not only relevant to the crypto market, it will bring a lot of impact to the overall economy. Without a clear recovery of COVID-19, not a single industry is 100% safe.
Additionally, the key driving factor of the series of market pump is increasing the market anticipation for DeFi prospects. However, DeFi is still at an early stage, wherein its security and usability still needs to be tested.
Overall, it is still too early to be fully optimistic and to start building heavy positions.