Ethereum’s total value locked (TVL) has increased by an impressive $7.79 billion over the past week, making it the blockchain with the highest TVL growth over the period. This significant development coincides with the temporary rise in ETH price to $4,000, indicating renewed investor confidence in the cryptocurrency.
It is not the only blockchain that has seen significant growth. However, according to recent data, no other project has seen the level of growth that Ethereum has.
Trust in Ethereum Reaches New Levels
On December 2, Ethereum’s TVL was just under $70 billion. Today, however, the metric has grown to $77.15 billion. TVL is a vital metric within the cryptocurrency and decentralized finance (DeFi) ecosystem.
It represents the total value of assets locked or staked in decentralized applications (dApps), smart contracts, or blockchain-based protocols. This metric serves as an indicator of growth, adoption, and user trust in DeFi platforms.
A higher TVL indicates that more users are interacting with these systems, which indicates confidence in their functionality and security. On the other hand, a lower metric indicates less liquidity, which indicates less deposits on the blockchain.
Therefore, the rise in Ethereum’s TVL indicates the growing adoption and popularity of the cryptocurrency among investors. This rise suggests increased confidence in Ethereum-based decentralized applications and protocols.
If this trend continues, it could lead to an increase in the price of ETH, as a higher TVL is often associated with increased activity on the network and demand for the asset. It is also important to note that the TVL of TRON and Solana also increased by $900.23 million and $618.40 million.
Furthermore, Glassnode data showed that Ethereum inflows to exchanges fell to their lowest levels in more than a month. When exchange inflows rise, it means that holders are ready to sell.
However, since it has fallen, it indicates that many ETH holders have decided not to liquidate their assets, which is positive for the price.
ETH Price Prediction: $4,200 Target Looms
The 3-day chart of eth/usd shows that the cryptocurrency traded within a descending triangle between June and November. A descending triangle is a common pattern in bearish charts that is defined by a downtrend line connecting a series of gradually lower highs and by forming a flatter trendline along a fixed price level, acting as support as the asset’s price tests it multiple times.
A descending triangle usually indicates that sellers are gaining control, which could lead to a breakdown below the support line. However, the price of eth has broken through this channel, indicating that the cryptocurrency’s value could trade higher.
If this trend continues, Ethereum could rise above $4,096 and reach $4,200 in the short term. However, if the selling pressure increases and Ethereum’s TVL decreases, these expectations may not be met. In this scenario, ETH could drop to $3,175.