As a seasoned researcher with over two decades of experience under my belt, I’ve seen my fair share of market trends and fluctuations. However, the recent developments within the Ethereum ecosystem have left me intrigued and optimistic. The surge in investor demand, the rapid inflow into Ether spot ETFs, the rising daily transactions on the network, and the increasing burn rate – these are all indicators that point towards a bullish trend for Ether (ETH).
It’s possible that Ethereum may hit $5,000 in the near future, according to a recent report, due to growing interest from investors, favorable on-chain indicators, and heightened network usage.
On Wednesday, Ether exchange-traded funds (ETFs) experienced a 13-day influx of money, adding approximately $2 billion to their total. These funds initially amassed their first billion dollars from July to early December, but data from SoSoValue indicates that it took only five trading days for them to accumulate another billion.
Moreover, daily activities on the Ethereum network have climbed up to approximately 6.5 million from 5.6 million in the past few months. This growth aligns with the prediction of 5 million daily transactions in 2023, suggesting a surge in network usage.
The total Ethereum supply has now hit 120 million, a figure last seen in April 2023, but it’s important to note that the rate at which Ethereum is being destroyed (or permanently taken out of circulation) has been on the rise since September.
Destroying coins means transferring them to an unccontrollable wallet, thereby taking them out of circulation forever. As more transactions occur on the network and demand rises, the destruction rate accelerates. This leads to a decrease in the growth of Ethereum’s supply and creates deflationary pressure.
Increased network activity on Ethereum indicates a growing trend in the use and desire for decentralized applications. Consequently, this surge leads to more Ether (ETH) being destroyed via transaction fees. This destruction can create deflationary pressure on the total ETH supply, as the rate of burning may exceed issuance during periods of high activity.
Based on the current trends in demand and supply, it’s possible that Ethereum (ETH) might break through its previous highs, even surpassing the 2021 peak. According to CryptoQuant, if this momentum persists, Ethereum could potentially climb above $5,000.
Additionally, it was observed that the maximum price for Ethereum (ETH) at present, derived from the typical purchase price of its holders, approximates $5,200. This level represented ETH’s high during the 2021 market surge; however, as more investors join the market, this upper price threshold is projected to increase further.
In simple terms, the escalating cost of Ethereum has significantly boosted the overall worth of resources tied within its network, reaching an impressive $77 billion last Thursday – a figure not seen since early January 2022.
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2024-12-12 23:00