Huge Ethereum buy wall sends ETH to a 19-month high against Bitcoin

As the price of Ethereum’s Ether (ETH) surpassed $450, a huge buy wall on the major cryptocurrency exchange Bitfinex emerged. Shortly thereafter, ETH achieved $270, a 19-month high against Bitcoin (BTC).

The price of Ether against the price of Bitcoin

The price of Ether against the price of Bitcoin. Source: Skew

Throughout the past two months, ETH has sustained strong upwards momentum buoyed the rising user activity on Ethereum. 

Data from Etherscan shows that the daily transaction volume on Ethereum rose from around 420,000 in January to over 1.2 million transactions per day in August.

Why ETH price is surging and the demand for Ethereum is consistently growing

The explosive demand for Uniswap and small decentralized finance (DeFi) tokens has created a consistent demand for ETH. On the Ethereum blockchain network, users have to utilize ETH to cover transaction fees, which is also called “gas.”

The gas costs, as a result of surging daily transactions, led users to purchase ETH to pay for network expenses. Since early June, when the DeFi market began to see exponential growth, it fueled the buying demand for ETH.

According to data from on-chain market analysis firm Glassnode, the gas costs are surging so fast it is causing miner revenues to spike. The researchers wrote:

“Ethereum miners earned over $500,000 USD in transaction fees in the past hour. That is a new record high for a single hour (anomalous transaction fees earlier this year excluded).”

The ongoing trend is unlikely to change in the near term as second-layer scaling solutions and ETH 2.0 is far away. 

Hourly transaction fees on Ethereum spikes

Hourly transaction fees on Ethereum spikes. Source: Glassnode

Yet, the DeFi market is continuously expanding, leading more users to decentralized platforms, like Uniswap. It remains to be seen whether that would add more buying demand for ETH throughout September.

Spotting the demand, whales or wealthy individual miners are seemingly buying up ETH. Bitfinex chief technical officer Paolo Ardoino said:

“Someone wants really to buy ETH on Bitfinex 7k bid wall.”

Bitfinex is recognized as one of the few exchanges used by many whales, alongside Gemini and Bitstamp. The 7,000 ETH at a price of $458 is equivalent to $3.2 million, which is a large single buy order on an exchange.

A 7.044k ETH buy wall on Bitfinex

A 7.044k ETH buy wall on Bitfinex. Source: Paolo Ardoino

What traders say about the short-term trend

In the near term, traders are generally optimistic about the price of Bitcoin and Ether. Both top cryptocurrencies saw their respective monthly candle close at a multi-year high.

Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said a minor consolidation is likely. After that, Van de Poppe suggested another attempt at $12,400 is likely for Bitcoin price, with ETH leading the way. He said:

“Bullish. Reached the $12,000 area that I’ve pointed since the low. Would like to see consolidation above $11,600 here. If that happens, we’ll most likely see a rally towards $12,400 and new highs. $ETH already painting the way.”

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