Ethereum gains 15% in a week — Is a recovery to $3K back in sight?

Ether ( ETH ) rallied 18.7% between Sept. 17 and Sept. 23, pushing past Bitcoin ( BTC ) in terms of weekly gains as an increase in open interest, funding rates and network growth signal strong demand for ETH.

Ether’s price is up 4% over the last 24 hours to trade at $2,650, according to data from Cointelegraph Markets Pro and TradingView . In comparison, Bitcoin is trading at $63,678, up 1.8% over the last 24 hours. The total crypto market capitalization has risen by 2% over the same period to $2.3 trillion. 

ETH strengthens against Bitcoin 

Ether has increased 17.5% over the last seven days, outperforming Bitcoin, whose price has risen only 9.8% over the same period. 

The ETH/BTC ratio is also up approximately 7.5% over the last seven days, reaching a three-week high of 0.0424 on Sept. 23. 

ETH/BTC ratio. Source: TradingView

The reversal in the ETH/BTC ratio indicates increasing demand for Ether. Data from Farside investors shows that flows into US-based spot Ethereum ETFs turned positive last week, seeing minor inflows of $5.2 million and $2.9 million on Sept. 19 and Sept. 20, respectively.

However, flows into Ethereum investment products still lag behind Bitcoin’s, with Ether seeing outflows for the 5th consecutive week, totaling $29 million between Sept. 16 and Sept. 20, according to CoinShares.

CoinShares head of research James Butterfill noted:

“This is due to persistent outflows from the incumbent Grayscale Trust and scant inflows from the newly issued ETFs.”

Ether’s outperformance is also evidenced by decreasing BTC market dominance. The chart below shows that Bitcoin’s dominance has dropped from a high of 58.7% on Sept. 19 to 57.4% on Sept. 23. This indicates that the top cryptocurrency is weakening against altcoins, including Ether.

Bitcoin market dominance chart. Source: TradingView

With Bitcoin dominance steadily dropping, market participants expect ETH’s value against its BTC pair to continue rising, suggesting that investors feel more bullish about Ether and could possibly allocate more money to Ethereum investment products.

Data from Coinglass reveals that the eight-hour Ether open interest-weighted funding rate has flipped positive since Sept. 16, currently standing at $0.0072%. 

Ether OI-weighted funding rate. Source: Coinglass

A positive funding rate for Ether reflects increased demand for leveraged long positions, signaling a bullish outlook. 

Related: Bitcoin core dev to ‘unite’ Bitcoin and Ethereum with cross-chain tunnels

Ethereum network activity signals higher demand for ETH

Analysing Ethereum’s network activity and its scaling solutions is critical to understanding what it takes to hold the $2,600 support. Decentralized applications (DApps) are at the core of this layer-1 blockchain and increasing use in terms of transactions is indicative of higher demand for ETH.

According to DappRadar data, over the last 24 hours, the top Ethereum DApps have seen an average 1.42% decrease in the number of unique active wallets and a 21.92% gain in volume.

Blockchains ranked by 24-hour DApp volumes. Source: DappRadar

Moreover, the number of DApp transactions on the Ethereum network has increased by 6.5% over the same period, fueled by increases in Uniswap, Balancer, ParaSwap, and Aave. 

Additional data from DefiLlama reveals an uptick in the total value locked (TVL) on Ethereum, which has increased from $44.1 billion to $49.65 billion between Sept. 18 and Sept. 23. Increasing TVL signals increasing user interaction with the blockchain, leading to higher demand for Ether.

Total value locked on Ethereum. Source: DefiLlama

Sustained network growth, an increase in Ether transactions, and DApp usage are essential for holding ETH above $2,600.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.