Ethereum broke out of a one-week consolidation streak on Monday when it outperformed Bitcoin (BTC) to reach $3,730. The price increase highlights rising social media activity for Ethereum following Vitalik Buterin's speech at Tuesday's Hong Kong Web3 carnival.
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Ethereum has been showing high social media activity since Monday, according to data from LunarCrush. Here are some of the market movers causing increased attention for the largest altcoin:
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Ethereum's price has seen a correction in the past 24 hours after reaching a three-week high of $3,730 on Monday. Its recent price increase indicates a short-term excitement among long traders. However, liquidation data from Coinglass on Tuesday shows bears are beginning to have their way, with ETH seeing the largest liquidation of more than $69.5 million. Liquidated long positions account for $48.9 million.
The largest single liquidation order occurred in an ETH-USD-SWAP worth $7.5 million. ETH is trading at $3,515, down 3.5% on the day. It has broken previous support levels of $3,570 and $3,517 and tested the next support of $3,479. This move is to fill the liquidity void posted on Monday.
Read more: Ethereum continues consolidating as Q1 results show massive growth for the largest altcoin
ETH/USDT 4-hour chart
If bulls show weak hands, ETH could decline further, especially as Bitcoin trades in the red on Tuesday.
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.