Ethereum (ETH) Price Rallies Above $420 as Total Value Locked in DeFi Hits $5 Billion

Ethereum’s native cryptocurrency, Ether has experienced an explosive price action in the last few hours. ETH surged by more than 8 percent to move past the $420 price mark breaking out of a week-long consolidation.

Also, the Ethereum based decentralized finance ecosystem just registered a new milestone. The total USD value locked in DeFi hit the $5 billion mark.

ETH Regains Position Above the $420 Level After 2 Years

In a thunderous bout of volatility, ETH jumped by more than 8 percent to register a local top above the $420 price level. Ethereum’s native cryptocurrency has achieved this feat after precisely two years of undergoing an overall bearish market stance. The last time ETH was trending around $400 was during the first few days of August 2018.

ethusd_chart
ETH/USD. Source: TradingView

Although ETH’s market outlook has been bullish since the beginning of the year, one might wonder what caused this sudden movement in price. There are a few reasons – the soaring DeFi craze being one of them. But looking at Ethereum futures markets, the reason becomes pretty evident.

Over the last three days, crypto derivatives platform BitMEX saw around $1.4 million worth of ETHUSD sell liquidations. Since the overall stance is bullish futures traders shorting, ETH ended up receiving the short end of the stick.

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BitMEX 3-Day ETHUSD Sell Liquidations, Source: Skew
BitMEX 3-Day ETHUSD Sell Liquidations, Source: Skew

But the liquidation story is gorier when it comes to Bybit. According to the market analytics firm, Skew, the futures trading platform saw around $6.1 million of ETHUSD short liquidations taking place in the 3-day timeframe.

Bybit 3-Day ETHUSD Sell Liquidations, Source: Skew

Together these two platforms contributed to around $7.5 million worth of ETHUSD shorts being liquidated. Futures markets have a significant impact on the prices of cryptocurrencies. This time too, wasn’t different.

Total Value Locked in DeFi Hits $5 Billion

It’s only the 8th month since the year began, but it seems Christmas has arrived early for Ethereum. As mentioned above, ETH prices soared above $400, but on the other hand, the Ethereum-based decentralized finance (DeFi) ecosystem is also rising in valuation.

As per the DeFi tracking website, DeFi Pulse, the total USD value locked in DeFi is already above the $5 billion mark with $4.94 billion being the exact figure. Currently, there are 4.5 million ETH, and 27k BTC locked up in the ecosystem.

DeFi Statistics August 14, 2020, Source: DeFi Pulse

This comes amidst the rising popularity of Curve Finance, one of DeFi’s top protocols. Curve experienced a 45 percent appreciation in USD fund deposit in 24 hours.

$CRV, the protocol’s governance token launch today is the supposed reason behind the massive funding pump.

The Curve DAO token is currently doing $2.8 million in daily trading volumes with a $100,000+ liquidity against ETH, on Uniswap.

According to analysts, this rally is just the beginning for ETH. The second most popular cryptocurrency has more fuel left to achieve a higher price in the days ahead.

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