Earlier today, Ethereum managed to revisit the $3,800, here are possible reasons why it happened
Statistics shared by insider Colin Wu and on-chain data Santiment agency shows what drove Ethereum to the $3,800 price mark earlier today and what is still holding it in the $3,750 area.
On September 1, Ether broke above the $3,500 level, recapturing it for the first time since the middle of May.
NFT craze and burned ETH fees
Chinese blockchain journalist Colin Wu has tweeted that the recent price surge of the second largest crypto, Ethereum, is largely down to the rising popularity of non-fungible tokens (NFTs) that are mostly based on the ETH blockchain.
This year, several expensive pieces of art have been sold as NFTs and the Tron CEO Justin Sun boasted buying some of them. He bragged grabbing the artwork by Picasso and Warhol – “Femme nue couchée au collier” and “Three Self-Portraits” – at the price of $20 million and $2 million respectively.
He has also bought the EtherRock 87 NFT for $611,000. As another example of popular NFT sale the Fortune’s NFT collection can be mentioned. The renowned magazine launched its non-fungible token collection that includes its recent cover art and sold it for $1.3 million worth of Ethereum.
The second reason mentioned by Wu is the fact that as of September 2, 164,000 Ethers have been incinerated. The implementation of the EIP-1559 Ethereum upgrade on August 5 now allows burning part of ETH fees.
Investor focus moving from SOL to ETH
As per the data provided by Santiment analytics vendor, the crowd sentiment at the moment is shifting from Solana (SOL) to Ethereum and that was one of the reasons that pushed ETH first above $3,500 on Monday and today contributed to ETH reaching the $3,800 level.
On August 31, SOL reached an all-time high of $130, hitting $100 just one day prior to that.
Also, according to CryptoQuant on-chain analytics company, the Ethereum supply on centralized crypto exchanges have been greatly reduced in the past week.
📈🤝 #Solana (+52%) and #Ethereum (+18%) have been exchanging turns in the spotlight over the last week as both have enjoyed respective pumps. Crowd sentiment has played a role in both pumps, and the focus that was on $SOL has very much shifted to $ETH. https://t.co/GGBYzFG602 pic.twitter.com/Nup7Zf8aQ7— Santiment (@santimentfeed) September 2, 2021