Source: Huali Huawai
In January 2021, ETH broke through the previous high of 1400 dollars (in January 2018), and after a brief adjustment of less than two months, it entered a rapid rise mode, reaching nearly 4400 dollars at its peak, which was also exactly one year after Bitcoin's third halving.
From past cycles, ETH's rise often lags behind BTC, which is actually a quite normal behavior. If history can repeat itself, we can expect that in the first quarter of next year (2025), ETH may start its real upward mode.
As of the writing of this article, the price of ETH is close to 3900 dollars, which seems to be a relatively good new starting point. It depends on whether we can stabilize this range and continue to break through in the next two weeks. As shown in the figure below.
For a long time, many people have been FUDing Ethereum, but if we start from the price of over 800 dollars in June 2022, ETH's price has nearly increased by about 5 times by now. Unless something unexpected happens, perhaps by next year, we might see ETH above 5000 dollars.
Next, let's continue to briefly outline what we need to pay attention to from a broader perspective, or what positive factors still exist for ETH:
1. Federal Reserve interest rate cut cycle
According to the dot plot released in September, the Federal Reserve's interest rates are expected to decrease by about 2% from the current 4.75% in two years. As shown in the figure below. Therefore, from a macroeconomic perspective, we are still in the early to mid-stage of a new economic cycle, and as global liquidity changes, a portion of funds will inevitably continue to flow directly or indirectly into the cryptocurrency market.
2. ETH ETF inflow/outflow
Currently, over 28.5% of ETH tokens are staked (as of the writing of this article, 34,292,149 ETH are staked). Next, one of the key areas we need to focus on is the outflow/inflow data of ETF funds, which will also become one of the most important factors affecting the direction of ETH prices. Once more funds (liquidity) start to flow into Ethereum on a large scale, it will undoubtedly further drive the development of the Ethereum ecosystem (DeFi ecosystem, L2 related ecosystems, etc.), thereby further enhancing the demand for ETH tokens.
Currently, ETH is the only currency other than BTC that is accessible through ETFs, and from the recent funding dynamics, ETH ETFs are continuously generating positive inflows. As shown in the figure below.
According to data monitoring from Lookonchain, in the past month, 9 Ethereum ETFs have significantly increased their ETH holdings, totaling 362,474 ETH (approximately 1.42 billion dollars), which is an increase of 4,363% compared to last month. As shown in the figure below.
3. ETH/BTC ratio
This exchange rate indicator is also used by many analysts to observe possible reversal trends or altcoin seasons. Generally speaking, if you find that ETH starts to outperform BTC in exchange rate value, this is a strong signal indicating that market interest in altcoins is rapidly rising, and funds are flowing into altcoins in large amounts. From the current ratio trend, it has basically reached a relatively bottom range, and the MACD indicator has also shown signs of rebound. As shown in the figure below.
4. Continuous accumulation by whales
Currently, the amount of ETH controlled by ETH whales has increased by over 30% compared to a year ago, with the largest 200 Ethereum wallet addresses now holding a total of 83.69 million ETH. As shown in the figure below.
In the past year, BTC has continuously created historical highs, while ETH has always maintained a certain distance from its ATH. Nevertheless, whales have been continuously accumulating ETH, while retail investors have been criticizing ETH as garbage.
5. Pectra upgrade
The Pectra upgrade is considered the next important milestone for the Ethereum network, expected to be implemented in the first quarter of 2025. This upgrade focuses on several technical improvements and optimizations, primarily consisting of two parts: the Prague execution layer upgrade and the Electra protocol layer upgrade.
Although the Pectra upgrade currently seems to lack a prominent goal, it focuses more on account abstraction, smart contract efficiency, improvements for validators, Verkle trees for better data management, layer two solutions, and PeerDAS, among others. However, we expect that through a series of technical improvements and optimizations, the Ethereum network will become faster, transactions cheaper, more scalable, and easier to use. At the same time, the market does not rule out the possibility of another wave of speculation due to this upgrade.
For more information about the Pectra upgrade, interested friends can directly use Google or ChatGPT to search or learn more.
In summary, regarding Ethereum, we still maintain the viewpoint from previous articles: as a currency that does not have unlocking and miner selling pressure, as a currency that still holds the title of the king of altcoins, as a currency that remains the largest cryptocurrency ecosystem, and as the only currency other than BTC that is accessible through ETFs... we should still hold a more optimistic attitude towards Ethereum's future development. If most people are FUDing Ethereum, it indicates that it is precisely the time for you to continue to accumulate.
Note: The above content is just personal opinions and analyses, only for learning records and communication purposes, and does not constitute any investment advice. Any projects or websites mentioned in the article have no direct financial relationship with the author (the author does not accept any advertisements from project parties). Please evaluate the safety of corresponding projects or websites on your own. Investment always carries risks; avoid situations you don't understand, and don't engage in scenarios you can't afford to lose.
