The price of Ethereum has the potential to rise above $5,000 as demand and supply dynamics evolve. According to new data from analysts, Ethereum is in a significant growth process.
The renewed interest of large institutional investors, especially BlackRock and Fidelity, through spot Ethereum ETFs traded on the US stock exchange further strengthens this bullish expectation.
“If current demand and supply conditions continue, Ethereum’s price could surge above $5,000,” CryptoQuant analysts wrote, emphasizing Ethereum’s solid fundamentals and growth potential.
The Role of Supply and Demand Dynamics in Ethereum Price Predictions
CryptoQuant analysts note that supply constraints in the Ethereum market are increasingly playing a critical role in determining price action. The realized price bands—values that reflect Ethereum’s average purchase price—place the current upper limit at around $5,200. This level is in line with the peak seen in the 2021 bull market. As new investors enter the market and continue to buy Ethereum at rising prices, this theoretical upper limit is likely to continue to rise, offering strong upside potential for the Ethereum price.
Increased On-Chain Activities Strengthen Ethereum’s Market Status
Ethereum’s increasing on-chain activity is a sign of the network’s growing ecosystem. Daily transactions are expected to be between 6.5 million and 7.5 million in 2024, a significant increase from last year’s average of 5 million. This increase also reflects the expansion of decentralized application (dApp) usage and the increase in daily contract calls. This increase increases network fees and increases the burn rate under Ethereum’s expense burn mechanism.
Institutional Investors Turn to Ethereum ETFs
Recent data shows that institutional investors are increasingly interested, particularly through spot Ethereum exchange-traded funds (ETFs). BlackRock and Fidelity led the trend, buying nearly $500 million in just two days. These significant flows show that Ethereum ETFs are gaining popularity as a reliable investment vehicle, with a total of $1.95 billion in net flows over the last 13 days. This shows that institutional investors are showing serious commitment to Ethereum.
ETF Flows and Their Effects on Market Value
During the last bull market, Ethereum ETFs experienced $102 million in net inflows, reporting 13 consecutive days of positive inflows. During this period, these funds attracted a total of $13.18 billion in assets, which is approximately 2.86% of Ethereum’s total market cap. This sustained interest is a healthy shift in market sentiment and provides a solid foundation for Ethereum’s future growth.