Ethereum Proceeds Toward New All-time High Amid ETF Demand: Will ETH Price Succeed?
Ethereum, the second-largest asset in the crypto market by market capitalization, has surpassed the $4,000 mark, a peak seen in March 2024. The surge was triggered by strong demand for the Ethereum ETF. This reflects the 65% rise in Ethereum prices over the last month following the election of Donald Trump as the 47th President of the United States, marking a significant rebound after lagging behind Bitcoin for some time.
Institutional interests control Ethereum price
Ethereum has climbed above $4,000, reaching its highest levels in March 2024 after a period of subdued trading activity. Data from Coinglass shows that Ethereum liquidations totaled nearly $87 million in the past 24 hours.
In March 2024, the launch of the Dencun upgrade significantly reduced the cost of Ethereum Layer-2 expansion solutions, resulting in a 99% drop in Ethereum Layer-1 network revenue. The reduction in fees initially led to reduced demand for smart contract-based cryptocurrencies. Still, by September 2024, network fees will start rising again.
Also read: Ethereum breaks through $4,000 as demand for ETH ETF grows
Data from Token Terminal shows that on December 5, the Ethereum base layer collected approximately $11 million in fees. By comparison, during the peak of fee suppression in August 2024, Ethereum fees were around $500,000.
According to CoinGlass, the growing demand for Ethereum ETFs has driven the surge in Ethereum prices. On December 5, the daily net inflows of Ethereum ETFs hit a record high, exceeding $430 million. Ethereum ETFs saw inflows of more than $1 billion last week, with BlackRock contributing $788 million, according to data from Farside Investors.
Heavy inflows into major Ethereum ETFs as bullish analysis increases. In November, Plume CEO Chris Yin explained that expectations for more favorable cryptocurrency regulations under President-elect Donald Trump were creating “belated excitement” for the funds, which launched in July Transactions in the United States.
What’s next for ETH price?
Ethereum price is currently showing a strong buying pattern, crossing the $4,000 mark. Buyers will now aim to keep prices above this level to validate further gains. At the time of writing, ETH price is trading at $4,016, having surged over 2.5% in the past 2 hours.
The uptrending 20-day exponential moving average (EMA) at $3,837 and the positive relative strength index (RSI) suggest that bulls currently have the upper hand. If Ethereum breaks the upper limit and closes the day, it could spark a rally that could lead to a breakout of $4,400 with a target of $4,800.
Conversely, if Ethereum breaks out and closes below the EMA20 trendline, it will mark a shift of advantage for the bears, which could lead to a drop towards $3,500 and possibly even further towards $2,700. If these supports fail, the next key level could be the 50-day simple moving average at $2,200.
