Ethereum shows strong momentum with experts predicting $5,000+ price potential, driven by record network activity, institutional ETF demand, and deflationary tokenomics.
Ethereum (ETH), the second-largest crypto by market capitalization, is gaining quite the momentum, and experts believe that a price surge above $5,000 is not unthinkable at this point.
According to a recent report from The Block, analytics firm CryptoQuant forecasts significant price appreciation for Ethereum based on three key factors: robust on-chain activity, surging institutional demand, and deflationary token dynamics. These market indicators, the report suggests, point toward sustained growth potential for ETH $3 937 24h volatility: 4.1% Market cap: $474.55 B Vol. 24h: $43.87 B .
Per CryptoQuant, Ethereum’s network has recorded an explosive growth in its activity through 2024. To put the above statement into perspective, daily transactions have now surged to between 6.5 to 7.5 million. That is, up from an average daily transaction of 5 million as of 2023.
Similarly, decentralized application (dApp) usage, measured by contract calls, has risen to 6 to 7 million daily. This increased activity has, in turn, driven higher transaction fees, resulting in more ETH being burned under Ethereum’s fee-burning mechanism.
This ultimately created a situation in September, where the burn rate started to exceed the issuance of new ETH. Therefore, creating deflationary pressure that limits supply growth.
According to CryptoQuant analysts, realized price bands are one key metric that they have used to project Ethereum’s future value. This metric currently shows the upper limit at $5,200 — a level that is similar to the peak level Ethereum attained in the 2021 bull run.
The analysts predict that as new investors enter at higher price points, this upper band will rise further, meaning that there will be even more room for an upward movement.
While on-chain metrics already give enough optimism for a potential ETH price surge, institutional interest in Ethereum is also stronger than ever.
Spot Ethereum exchange-traded funds (ETFs), including those from BlackRock and Fidelity, have seen record inflows. Over the past 13 days, ETH ETFs have recorded a streak of positive flows, accumulating nearly $2 billion during the period. This brings total assets to $13.18 billion.
The substantial surge in ETH ETF flows signals growing institutional confidence in Ethereum as a strategic investment vehicle. Giving more credence to this line of reasoning is the fact that the ETH/BTC ratio also continues to climb. The implication of this is that investors may be porting from Bitcoin to Ethereum as a preferred investment choice.
To further corroborate the above claims about Ethereum’s price performance, it has gained 4.69% in the past 24 hours. That is, as opposed to Bitcoin’s 1.40% rise, according to Coinspeaker’s market data.
This disparity, however, might be linked to increased trading volumes and renewed optimism within the broader crypto market.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this. He's a reader, a researcher, an astute speaker, and also a budding entrepreneur. Away from crypto however, Mayowa's fancied distractions include soccer or discussing world politics.
