Ethereum
Ethereum faces resistance at $4,000, but current data favors bulls
Ethereum has become a symbol of innovation in the blockchain space, attracting many innovators to develop their crypto projects there. As a result, there are many decentralized applications on the blockchain.
Ethereum is also the second largest blockchain and the largest altcoin project. This is the reason why the crypto market is expecting the US SEC to approve Ethereum spot ETFs in the near future. This analysis will cover the recent ETH price movement and its future catalysts.
ETH’s recent gains are linked to decreasing staking supply and demand, the popularity of DeFi, and the proof-of-stake burning mechanism
On February 25, Ethereum broke above the $3,000 price level, a critical resistance zone, and has been steadily rising since. On March 11, ETH reached $4,000, before pulling back slightly on the 12th. Current data suggests that ETH has the potential to surpass the $4,000 level and possibly enter a major bull run.
Confidence that ETH price will surpass the $4,000 level and enter an ETH bull run is based on several factors, including the decreasing supply of Ethereum, driven by demand for staking. ETH supply may decrease due to the network’s proof-of-stake burning mechanism. Once ETH rises above $4,000, it may encounter strong resistance at $4,065, $4,185, $4,220, and then $4,300.
Many ETH enthusiasts predict that an Ethereum season will take place in the near future. As a result, some Ethereum investors are holding on to ETH in anticipation of a higher price at the right time, considering that several expected upgrades on the blockchain could increase demand for the coin.
Source: x.com
As the screenshot indicates, crypto analyst and enthusiast Ryan S Adams expects the demand and price of ETH to increase due to the staking and restaking of the coin. The expansion of the DeFi ecosystem based on the Ethereum network will also likely increase demand for ETH, which could contribute to a potential Ethereum price surge. Once Ethereum price rises above $4,000, the market expects it to break above the $4,300 resistance level, positioning itself for Ether’s next bull run.
Ethereum Prices Become Catalysts as We Move Beyond Dencun Upgrade
Several factors are likely to influence the Ethereum Price in 2024, including an increase in staking, the Dencun upgrade, ETH ETFs and a decrease in its supply. The Bitcoin halving may also affect the price of ETH due to their correlation.
Decrease in supply of Ethereum: During a 30-day period that ended on February 24, the circulating supply of Ethereum decreased by 18,960 ETH, while starting on February 15, there was a preference for net withdrawals. The following chart gives a summary of net ETH transfers to exchanges, indicating an increase in selling pressure.
Net Ether Transfers to Exchanges – Glassnode
Usually, net transfers to exchanges increase when Ethereum holders want to sell their coins. Nevertheless, the fact that the price of Ether has remained stable around $2,300 indicates that the rise in Ethereum sales is not linked to a rise in prices.
SEC Approval of Spot ETH ETFs Could Trigger Ethereum Price Surge: We noted that the SEC’s spot approval of the Bitcoin ETF in January increased demand for Bitcoin. For example, BTC ETF issuers like BlackRock have acquired a lot of bitcoin in a short period of time. The market expects a similar effect on ETH demand if the SEC approves ETFs.
The approval of spot ETH ETFs will likely trigger a rise in Ethereum prices and a possible ETH bull run. Currently, many crypto analysts have said that there is a 50% chance that the SEC will approve ETFs. For example, Nikolaos Panigirtzoglou, an investment analyst at JPMorgan, told TheBlock that there is a 50% chance that the SEC will approve ETH ETFs. The earliest scheduled date for approval of Ethereum spot ETFs is May 23.
Future Ethereum premium increase: The market generally uses changes in the price of ETH futures to gauge the possible future trend of ETH. In a neutral ETH market, Ethereum futures often trade at a premium of between 5% and 10%. Significantly, a premium of more than 10% shows that demand for the coin may increase or remain high, influencing the rise in the price of the underlying asset. However, in the case of Ethereum, the premium remains above 14%, indicating strong demand for ETH.
The Ethereum Dencun Upgrade: A number of upgrades planned for the Ethereum blockchain, such as the recent one from Dencun, could also drive up the price of ETH. Dencun, the Ethereum protocol upgrade, launched on March 13, will bring significant benefits to the blockchain such as reduced transaction fees.
Increase in decentralized finance on Ethereum: Several crypto projects have launched decentralized financial protocols on the Ethereum blockchain, which could increase demand for ETH. For example, there has been an increase in liquid staking tokens (LRT) on the blockchain. Ether.FI and Puffer are examples of DeFi platforms that have introduced high-yielding liquid staking tokens (LRT). Interestingly, some of the recently introduced DeFi protocols are offering airdrops to the Ethereum community. As an example, Starknet, an Ethereum rollup, recently introduced the STRK airdrop, which helped increase demand for ETH. These factors, among others, can help boost the Ethereum season.
Conclusion
Ethereum’s all-time high was $4,706 – reached in November 2021. Currently, the $4,000 Ethereum price level provides some resistance, forcing the value of ETH to stay below for the time being . However, various factors can contribute to pushing up the price of ETH. The decrease in its circulating supply, the ETH refresh, the Dencun upgrade, and the increase in DeFi on the Ethereum blockchain could lead to an increase in the coin’s value – and a potential new all-time high in the months to come.