Throughout the past two weeks, ETH has underperformed against Bitcoin. Due to the uncertainty in Bitcoin’s short-term price cycle, other major cryptocurrencies stagnated.
The recent near-term price range breakout coincides with Bitcoin’s convincing recovery above $19,000. Hence, the combination of the two technical factors could aid a strong ETH rebound.
Eth2 and high DeFi TVL are consistently positive catalysts
When the price of ETH was at near $600 in 2018, the total value locked (TVL) across DeFi was lower than $200 million.
Since then, the TVL in DeFi on Ethereum has grown from $200 million to over $14 billion, recording a 70-fold increase within three years.
It is also a reassuring sign that dominant early players, like Maker, have been able to maintain their dominance despite the emergence of new DeFi protocols. This indicates that DeFi protocols with network effect have staying power, which shows the confidence of DeFi users.
“No farming program this year and lots of questions, yet Maker has maintained its DeFi throne. Dai transaction volume has exploded to over $125B and TVL is over $2.6B”
Another major component of the Ethereum blockchain that did not exist in 2018 was Eth2.
Eth2 has been a crucial network upgrade that has been in the works for several years. The release of the Beacon Chain in December 2020 marked the launch of Eth2 for the first time in Ethereum’s history.
The confluence of strong technical and fundamental factors, and the improvement in the medium-term outlook of Ethereum due to Eth2, place ETH in an ideal position to see newfound upside momentum.