Ethereum topped $4k yesterday for the first time since 2021. At the same time, Bitcoin pushed through its all-time highs and made a new high of $70K. Ethereum has since made a slight correction of 0.25%. As of 11:36 GMT+3, Ethereum was trading at $3940. However, trading volumes were on the rise, increasing by 12.25% to hit $23.82 billion.
The rising Ethereum buying volumes indicate the increased investor optimism that Ethereum is headed much higher. One of the key factors driving the momentum around Ethereum is the upcoming Dencun upgrade scheduled for March 13. Investors anticipate that the upgrade will help keep Ethereum decentralized while increasing the number of transactions handled through Ethereum layer-2s without requiring unrealistic gas fees.
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Polymarket is predicting that blobs (~125 kB) will cost ~0.001 ETH.
Today, 125 kB calldata costs ~30 gwei per gas * 16 gas per byte * 125000 gas ~= 0.06 ETH
And if you think polymarket’s guess that blobs will be 60x cheaper is over-optimistic, you can use the market to hedge! pic.twitter.com/vUwJInNhCP
— vitalik.eth (@VitalikButerin) March 3, 2024
Ethereum Market Dominance Likely To Rise
This is a big deal for Ethereum, which continues to dominate the market in terms of total transaction values despite its high gas fees. Data shows that Ethereum layer-2s are currently transacting more than $37 billion. This is more capital flowing within the Ethereum layer-2 space than major layer ones such as Solana, Cardano, Tron, and many other popular ones.
🚀#Ethereum‘s Layer 2s continue their meteoric rise!
Well over 37 BILLION US DOLLARS are now within the ETH L2 Ecosystem.
Neither #Solana, #BNBChain, #Cardano, #Tron nor any other L1 even comes close to this amount of capital!#ETH, the future of finance is scaling faster… pic.twitter.com/UkMYAZ6d4S
— Leon Waidmann | On-Chain Insights🔍 (@LeonWaidmann) March 9, 2024
Essentially, this means once Ethereum implements the Dencun upgrade, it could quickly increase its market dominance by several multiples. That’s because, with cheaper, faster transactions, there is no point in Dapps trading the security that comes with Ethereum for other networks. Security already seems to be a major factor, given that Ethereum gobbles up the most significant chunk of transactions despite high gas fees and slower speeds.
Such positive metrics have given the market the impression that Ethereum could be headed for an exponential surge in demand. As more investments flow into Ethereum by investors anticipating a price spike after Dencun, Ethereum could easily top its all-time highs and make new ones next week.
The high expectations around Ethereum, as seen in its price and the rising trading volumes are also enhanced by positive expectations around the approval of an Ethereum ETF in May. The approval of this ETF could open the floodgates for institutional money. Considering Ethereum’s deflationary nature, this could send it to new highs, with some analysts projecting prices as high as 20k.
SEC met with Coinbase regarding the Grayscale Ethereum Trust and ETH ETPs.
I’m sure it’s nothing though. pic.twitter.com/EV2QfeCjHl
— eric.eth (@econoar) March 8, 2024
The rise in Ethereum demand is driven by the upcoming Dencun upgrade, excitement around the approval of an ETF, and overall bullish momentum in the market as Bitcoin makes new highs of $70k.
Ethereum Trading Inside Symmetrical Triangle, A Signal To An Imminent Breakout
Ethereum is currently trading a symmetrical triangle with selling volume thinning out.
Ethereum’s price action indicates that a slight increase in buying volumes could trigger a major bullish breakout that could see Ethereum hit prices above $5k in a short time.
On the other hand, if Ethereum bears take control and force a downside breakout, the odds are that Ethereum could turn bearish in the short term. In such a scenario, Ethereum could easily drop to around $3500 in the short term.
Ethereum Price Prediction – Why $5k Is Coming Soon
Ethereum is at the cusp of a breakout and, as mentioned above, could either push to prices above $5k or fall back to $3500. Of the two Scenarios, an upside break for Ethereum is most likely. That’s because there are tons of factors that support it, such as upside breakout.
The first is that Bitcoin has retested and pushed through its all-time highs. This has created the impression that alt-season is about to start. As such, there is a general sense of optimism across the market, and Ethereum, one of the better-known cryptocurrencies, is likely to draw most of this momentum.
In this environment of maximum optimism in the crypto market, Ethereum has a lot coming up both in the short and medium term. Short term investors are excited about the Dencun upgrade and how it could positively impact Ethereum demand.
In the medium term, investors are looking forward to the upcoming Ethereum ETFs, which have a hard capped date of May 23rd to either be approved or rejected. So many analysts are positive that Ethereum ETFs will be accepted and open the way for institutional money to flood into Ethereum in the short term.
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