Over the past 24 hours, Ethereum has dropped 7.6%, falling just below the key $3,000 mark. At press time, the cryptocurrency is trading at $2,934, according to CoinGecko.
Expanding the timeline, however, reveals a much more bullish narrative.
In the past week, Ethereum is up a whopping 14.9%. Since local lows on July 20, when the asset was trading at $1,734, the number two crypto has risen nearly 70%.
These moves can likely be attributed to two key factors.
First, and as per usual, Bitcoin has also enjoyed a steady rise from similar lows at the end of July as well.
At that time, Bitcoin fell below the crucial $30,000 price point, before mounting a run-up to $45,000 on Sunday evening. The leading cryptocurrency has cooled off today, shedding nearly 4% over the past 24 hours.
The correlation between the two assets is well known—when Bitcoin moves, the rest of the markets follow closely.
Over the past 30 days, the correlation between Bitcoin and Ethereum has been high and positive, according to data aggregator Cryptowatch.
The second factor behind Ethereum’s recent rise is the network’s latest upgrade, called “London.” On August 5, Ethereum executed one of its most anticipated changes which saw the integration of a coin-burn feature.
This integration, formally known as Ethereum Improvement Proposal (EIP) 1559, now means that a portion of the fees users pay in ETH to make their transactions will now be destroyed forever, or “burned.”
The integration has sparked discussions among enthusiasts that this will be a hugely bullish event for Ethereum. This is because, at least according to certain commentators, the demand for the asset will continue to rise, but as more and more Ethereum is destroyed there will be a supply constraint.
Today, the network is burning roughly 1.84 Ethereum per minute, or $5,378. This is a dramatic decline since the upgrade came into force last week.
Crypto Markets Hit Pause
Bitcoin and Ethereum haven't been the only losers today.
Of the top ten cryptocurrencies by market cap, Dogecoin has dropped the most. The popular meme coin is trading at $0.23, down roughly 12% over the past 24 hours.
Popular decentralized finance (DeFi) tokens like Uniswap, Chainlink, and Aave have also hit the skids.
These tokens have dropped 8.3%, 8.2%, and 7.3%, respectively.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.