Bitcoin (BTC) seeks to end its first official week in 2021 on a strong note as its price hit a new all-time high this Friday. The first and largest cryptocurrency surpassed $41,000 for the first time since its inception, hitting an all-time high of $41,986 before a corrective low.
On January 2, Ethereum made a breakthrough, climbing from $700 to $1,162 in 48 hours. The second-largest cryptocurrency climbed to a high of $1,291 on Jan.7 before halting its uptrend.
Increasing Institutional Appetite for Bitcoins and Cryptocurrencies
As 2021 ramps up, Bitcoin’s impact on the broader crypto market is growing. Bitcoin has risen by almost 90% since December 2020 amid growing institutional interest and shortage of supply limiting the available supply.
Ethereum and other crypto assets have benefited from Bitcoin’s rally so far. In this regard, on a 7-day basis, Ethereum (ETH), Stellar (XLM), and Cardano (ADA) have showcased prominent gains of 63%, 116%, and 64%, respectively. There is growing evidence that institutional investors are eyeing ETH as Bitcoin trading becomes crowded with players with deeper pockets. Bitcoin entered into the ‘uncharted territory’ the moment it surpassed its prior all-time high of $20k.
BTC/USD Daily ChartCrypto analyst Willy Woo noted the lack of references left on the Bitcoin spot chart to calculate resistance, given the latest all-time highs. Only Fibonacci sequences remained.
“When there are no historic resistance levels, magic numbers in nature is all we have for support and resistance bands. Bitcoin is in unrestrained price discovery in uncharted territory, literally,” he stated.
Higher Adoption Within Institutional Circles Due to Upcoming CME Ethereum Futures
The CME Group has revealed growing institutional interest in Ethereum and announced plans to launch a new ETH futures product in February.
Starting February 8, traders will have the opportunity to bet on Ethereum through regulated exchanges. A new futures product, called the CME CF Ether Reference Rate, will provide traders with more efficient access to the digital asset, allowing wider price discovery and possibly more widespread adoption in institutional circles.
The DeFi Boom Is Not Over
While the DeFi mania seems to have subsided after June 2020’s all-time highs, the sector is growing in step with the broader market. During the week, nearly every major DeFi coin in the top 20 reported double-digit weekly gains. Some even surpassing the explosive growth in Ethereum prices. Sushiswap and yearn. finance posted gains of 30% and 50% respectively in the prior week.
Since many DeFi projects are built on Ethereum, this may impact positively on the price of ETH. According to CoinMetrics, the DeFi boom could fuel Ethereum’s long-term growth.
Industry data also shows a significant increase in Total Locked Value, or TVL, in DeFi projects. According to the latest data, almost $21.7 billion has been locked in the ecosystem – the highest rate in history.
Image Credit: DEFI PULSE, Shutterstock
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