Why Ethereum is Growing and What is The Price Prediction
Last night, the price of Ethereum (ETH) crossed the $3,000 threshold for the first time since April 2022. What is the reason for this growth, and how will ETH behave in the future?
The second-largest cryptocurrency, ETH, briefly broke the $3,000 mark for the first time since April 2022. The weekly growth of the coin amounted to 13%. Ethereum's growth is primarily due to the overall positive mood in the market.
After the approval of the Bitcoin ETFs, many spoke about the growing interest in cryptocurrency products and bet that the U.S. Securities and Exchange Commission may soon approve Ethereum ETFs. Many issuers, such as ARK 21Shares and Invesco Galaxy, have already filed applications with the regulator. The excitement around this speculation has affected the price performance of ETH. Analysts are predicting a 50% probability of Ethereum ETF approval this spring.
On the odds of an $ETH ETF this year: @Matt_Hougan: “I think it’s probable we will get an ETH ETF reasonably soon. I think there’s a 50/50 chance by May, but the bigger story is what’s going on with the $BTC ETFs.” @SteveKurz: “This is just the beginning of a crypto asset… https://t.co/VCSllhmxPb
— Eleanor Terrett (@EleanorTerrett) February 13, 2024
Additionally, Glassnode noted that ETH has started to outperform Bitcoin ETFs since its approval, which is a change from the relative lag during 2023.
The optimism on the network is fueled by the Dencun update, which is expected to arrive as early as March. The update will noticeably improve network performance, lower gas fees and more.
The ETH rally was also influenced by the growing number of whales in the network, which only emphasizes the confidence of major players in Ethereum's long-term potential. This confidence is also evident in the fact that investors have added more than $1.5 billion worth of coins to staking contracts over the past week.
However, not everyone sees a positive outcome for Ethereum. Experienced investor Fred Krueger disputed the approaching altcoin season and also identified troubling aspects of Ethereum, one of which is the significant decline in the number of active daily Ethereum users: from 120,000 in 2021 to 66,000 in the last year. He also noted the network's problems with fees and speed.
ETH is completely detached from reality. A deep dive.
— Fred Krueger (@dotkrueger) February 21, 2024
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ETH is at $3,000. Surely this must mean that a ton of people are using ETH, and that this number is only going up, right?
Nope.
Eth, the chain has dropped from 120K… pic.twitter.com/141GwtB0yz
At the time of writing, the price of ETH was at $2,920, down 0.36% in the last 24 hours, resulting in the liquidation of short positions worth up to $15.47 million against $20 million of long positions. The bulls failed to hold the $3,000 level and the asset started to fall.
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Ethereum is currently in an overbought zone, as indicated by the RSI index exceeding 70. In the near term, ETH may continue to correct before significant growth. The key support level could be the $2,910 zone. Further, the price may fall to $2,880, $2,850 and $2,720.
This is not a one hundred percent statement. The cryptocurrency market is very volatile. Investors should be cautious and remember the importance of doing their own research.
