Ethereum Layer 2 TVL Nears $30 Billion Milestone
The Ethereum Layer 2 (L2) ecosystem is witnessing a surge in Total Value Locked (TVL), approaching the significant milestone of $30 billion as cryptocurrency prices continue to rise.
- Data from L2Beat shows that Ethereum L2 TVL has increased by over 9% in the past week, reaching a new all-time high of $29.42 billion.
- The largest contributor to this growth is Arbitrum, accounting for 45% of the total TVL with $13.26 billion locked. Other notable contributors include OP Mainnet with $7.57 billion, Manta Pacific with $1.89 billion, and StarkNet with $1.36 billion.
This substantial increase in Ethereum L2 TVL highlights the growing adoption and utilization of Layer 2 solutions, which play a crucial role in scaling Ethereum’s network and addressing issues such as congestion and high gas fees.
The recent rally in L2 DeFi tokens can be attributed to the optimism surrounding the upcoming Dencun upgrade, particularly the EIP-4844 proposal, which aims to significantly reduce gas fees.
Ether Exchange Supply At Just 11%
While spot Bitcoin ETFs continue to attract significant inflows, some market researchers believe that Ether holds promising potential due to anticipated advancements in the upcoming Dencun upgrade.
- Researchers from Bernstein point out that Ethereum’s DeFi ecosystem and layer-2 networks are key factors that contribute to ETH’s market resilience compared to Bitcoin.
- Bernstein also highlights the importance of the decreasing amount of Ether held on exchanges, which has reached a record low of 11%. This trend suggests an increasing preference for locking up more of the cryptocurrency.
Ether, the second-largest cryptocurrency globally, has experienced a remarkable 33% increase year-to-date, surpassing Bitcoin in terms of growth. This surge can be attributed to various catalysts beyond the anticipated approval of a spot exchange-traded fund (ETF).
ETH Price Action
ETH has maintained its position comfortably above the 50-day and 200-day Exponential Moving Averages (EMAs), indicating bullish signals for its price trajectory.
- If ETH surpasses the recent high of $3,276, it could pave the way for further upward momentum towards the $3,500 mark.
- On the other hand, if ETH drops below the critical support level of $3,200, it may bring the $3,000 mark into focus.
The 14-period Daily Relative Strength Index (RSI) is currently at 81.79, signaling that ETH has entered overbought territory. This suggests that there might be increased selling pressure around the recent high of $3,276.
Hot Take: Ethereum Gains Momentum Alongside Bitcoin
With Bitcoin leading the broader market rally, Ethereum has also joined the party with an additional 5% gain on Monday. As of press time, the Ethereum price is up 4.34%, trading at $3,230 with a market cap of $387 billion.
The surge in Ethereum Layer 2 TVL demonstrates the growing importance and adoption of Layer 2 solutions in scaling Ethereum’s network and mitigating congestion and high gas fees. The decreasing amount of Ether held on exchanges indicates a trend towards locking up more of the cryptocurrency. ETH’s price action suggests potential for further upward momentum if key resistance levels are surpassed.
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