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Over the past week, the leading altcoin has shot up, moving from a low this week of $234,85 USD to a high of $323,02 USD, boasting a staggering 37.5% difference.
The Increase Of The DeFi Market
There are several factors which could be pointing to the increase. One of them, which is possibly attributing to Chainlink’s skyrocketing price at the moment too, is increasing growth of the Decentralized Finance (DeFi) market. The positive sentiment surrounding DeFi as well as Ethereum 2.0 is setting the market abuzz with optimism.
Since May, the value locked in DeFi protocols has increased by nearly four times to hit a figure of $3.75 billion USD. Other popular protocols (such as Compound, Maker, Aave and Synthetic) have also experienced swelling volumes of users for the past month. Research leader at the institutional trading platform TradeBlock John Todaro commented that the growth of DeFi might continue to boost the price of Ethereum:
Look back to a report we published in 2019 around the impact DeFi could have on #Ethereum demand.
— John Todaro (@JohnTodaro1) July 24, 2020
The Futures Market and Ethereum’s Surge
Deribit, an exchange focused on Bitcoin and cryptocurrency futures and options trading, also offered that it had seen massive increases in the volumes for Ethereum options and open interest. The exchange tweeted that it had hit a new record high for ETH options:
We have a new record high for ETH Options volume and open interest!🚀
With a peak 24hr volume of $49 million, the Deribit ETH options OI sits at $241 million (and currently 93% of the global Ethereum market share)!
We can’t wait to see how this evolves! pic.twitter.com/F6vq08TDt6
— Deribit (@DeribitExchange) July 24, 2020
Whether this evolves to a long-term rally remains to be seen. Given the general sentiment of the market, it’s possible that Ethereum will enjoy a positive trajectory for some time to come.