According to analysts at CryptoQuant, Ethereum's price could grow significantly if the current supply-demand momentum is maintained, driven by on-chain pricing metrics and strong investor interest in Ethereum-based financial products.
Based on pricing data, Ethereum could aim for levels above $5,000 if the current supply-demand momentum continues, CryptoQuant analysts say.
They emphasize that the realized price bands of Ethereum are an important indicator in assessment. The realized value represents the average price at which Ethereum is traded. The current upper limit of the realized price bands is $5,200, reflecting the peak price of Ethereum during the 2021 bull run. CryptoQuant analysts note that as new buyers 'accumulate' Ethereum at higher prices, this price band will continue to rise, signaling further upside potential in the current market cycle.
The upper limit of Ethereum's realized value is around $5,200 | Source: CryptoQuant
Increasing network activity and deflationary momentum
CryptoQuant analysts say that Ethereum's on-chain activity has significantly expanded throughout 2024. The daily transaction volume currently ranges from 6.5 to 7.5 million, up from an average of 5 million in 2023.
Additionally, the number of daily call options, which represents the use of decentralized applications (dApps), has risen to 6 – 7 million this year, compared to 5 million in 2023.
Increased activity has driven higher network fees, resulting in more Ethereum being burned. CryptoQuant explains: 'The growth rate of supply has slowed down in recent months as the amount of Ethereum burned through fees has surged since September, causing deflationary pressure on the digital asset.'
The daily trading volume of Ethereum currently ranges from 6.5 to 7.5 million, up from an average of 5 million in 2023 | Source: CryptoQuant
Institutional demand is reflected through the strong increase in capital for Ethereum spot ETFs.
The demand from new investors is clearly shown through the strong growth of Ethereum spot ETFs listed in the United States. BlackRock's ETHA ETF and Fidelity's FETH ETF led the inflow this week, purchasing $500 million worth of Ether on Tuesday and Wednesday. The strong capital inflow highlights institutional interest in Ethereum as a digital asset and investment vehicle.
On Wednesday, Ethereum spot ETFs witnessed a total net inflow of $102 million, marking the 13th consecutive day of net inflows. Over the past 13 days, Ethereum ETFs have accumulated $1.95 billion in inflows, bringing total net assets to $13.18 billion. According to SoSoValue data, this figure accounts for 2.86% of Ethereum's market capitalization.
ETH has also shown strong momentum, outperforming Bitcoin with a 6% increase in the past 24 hours, compared to a 2% increase for BTC. The trading volume and upward trend in the ETH/BTC ratio further illustrate the 'affection' investors have for the second-largest market-cap asset.
The ETH/BTC ratio has increased by 2.82% over the day, with Ether now priced at the equivalent of 0.039 BTC. The rise in the ETH/BTC ratio indicates a shift in market sentiment, with investors becoming more optimistic about ETH compared to BTC.
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