According to the latest report from the blockchain analysis platform CryptoQuant, Ethereum (ETH) may soon welcome a historic moment by breaking the $5,000 barrier for the first time. Changes in supply and demand, as well as network development conditions, are important factors driving the rise in Ethereum's price, with the surge in spot ETF demand and supply tightening being particularly crucial.
Surge in spot ETF demand, recovery of investor confidence
Since the launch of the Ethereum spot ETF in July 2024, holdings have been on the rise, showing strong market interest in ETH. According to CryptoQuant's data, the total amount of Ethereum ETFs held in the U.S. market increased from 2.716 million ETH in September 2024 to 3.41 million ETH, setting a new historical high. This not only reflects a gradual recovery in investor confidence but also indicates that spot ETFs have become an important tool for attracting capital amid market uncertainty.
The increase in demand for spot ETFs provides strong support for the ETH price. The purchasing behavior of ETFs directly reduces the circulating supply in the market, creating significant buying pressure and laying the foundation for price increases.
Supply tightening effect highlighted, burn rate continues to rise
In addition to the increase in demand, Ethereum's supply situation is also favorable for price upward movement. The latest data shows that the total supply of Ethereum has reached 120 million ETH, but the daily burn rate has been steadily increasing. Since September, the burn rate has surged from an average of 80 ETH per day in August to over 2,700 ETH. This is mainly due to the increase in Ethereum network activity and the heightened activity of decentralized applications (dApps).
When the amount of ETH being burned exceeds the new issuance, the market experiences a deflationary situation, further exacerbating supply tightness. This tight state may provide additional support for the ETH price, especially in the context of increasing network usage.
ETH may break historical highs
CryptoQuant's valuation model shows that the current 'real price' ceiling for Ethereum is approximately $5,200, comparable to the peak of the 2021 bull market. If the current trends in supply and demand continue, ETH is very likely to break through $5,000 and even challenge higher prices.
In summary, Ethereum is in a favorable situation with strong demand and tightening supply. The continuous growth of spot ETF demand, coupled with active network applications, is creating favorable conditions for the rise in ETH prices. If this trend continues, breaking the $5,000 barrier is not out of reach. For holders and investors, this may be an opportunity worth looking forward to.