As a seasoned crypto investor with over a decade of experience in this dynamic market, I have learned to read between the lines and interpret the subtle signs that can lead to significant gains. The latest report from CryptoQuant on Ethereum (ETH) has caught my attention, and I am optimistic about its potential to breach the $5,000 mark in the coming weeks.
Experts from the blockchain analysis firm CryptoQuant believe they’ve spotted trends within the Ether network that might drive its price beyond $5,000 in the upcoming weeks.
As a researcher studying the cryptocurrency market, I’ve observed from my weekly reports that the Ethereum network is experiencing a resurgence in demand and heightened activity. Valuation indicators point towards a potential future trading price above $5,000 for this second-largest digital currency, given the prevailing supply and demand dynamics. Currently, Ethereum is valued at approximately $3,910.
ETH Sees Rising Demand
Based on the average purchase price of Ether ($5,200), this currently stands as the upper limit for the cryptocurrency. However, even though this level represented the peak for ETH during the 2021 bull run, the price range is expected to increase further as new investors continue to buy Ether at increasingly higher values.
The surge in interest for Ethereum (ETH) is evident as the number of ETH held by spot Ethereum exchange-traded funds (ETFs) reached an all-time high of 3.41 million coins. These investment products have experienced a substantial boost in their holdings since their debut in July 2024, representing a strong rebound from a low of approximately 2.716 million ETH recorded in September.
According to CryptoQuant, as investors are showing increased trust in ETH as a profitable asset, the continuous demand for Ethereum ETFs might help drive the price of Ethereum higher.
Supply Dynamics Flash Positive Signal
The positive flow of the cryptocurrency has been noticeable, particularly after the application of the EIP-1559 update that allows for the destruction of a fraction of transaction costs and decreases the overall minting. Consequentially, the Dencun upgrade caused the total Ethereum supply to reach its peak since April 2023; yet, the amount of ETH destroyed through fees has been on the rise since September.
Over the last few months, the rate at which new Ethereum (ETH) is entering circulation has slowed down significantly. This is because more ETH is being destroyed through transaction fees, with the amount rising from 80 ETH on August 30 to a current figure of around 2,700 ETH. This trend puts a deflationary squeeze on the Ethereum asset.
Moreover, Ethereum has seen a surge in network usage, reaching unprecedented levels in 2024. The number of daily transactions and contract calls has peaked at record highs, exceeding 6.5 to 7.5 million and 7 million respectively, which is a significant increase from the 5 million transactions and 5 million contract calls per day recorded last year.
It was noted by analysts that increased network usage on the Ethereum protocol results in more Ether being destroyed through transaction costs. This situation tends to boost the value of the cryptocurrency.
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2024-12-14 15:30