Ethereum Faces Resistance at $3K, Yet Current Data Favours Bulls
[TL; DR]
During February ETH faced much resistance around the $3,000 price level.
The decrease in ETH circulating supply, the increase in ETH restaking and the launch of the Dencun upgrade may lead to the Ethereum season.
The SEC’s approval of spot Ethereum ETFs may increase the demand for ETH crypto.
Keywords: spot ETT ETF, spot Ethereum ETF, ethereum investments, ethereum holders, Ethereum price, ethereum price surge, DeFi eco, ethereum supply, ethereum price, STRK airdrop, price of ETH futures, ether bull run
Introduction
Ethereum has become a symbol of innovation in the blockchain space attracting many innovators to develop their crypto projects on it. As a result, there are many decentralized applications on the blockchain.
Also, Ethereum is the second largest blockchain and the biggest altcoin project. That is a reason why the crypto market anticipates the United States SEC to approve spot Ethereum ETFs in the near future. This analysis will cover the recent ETH price movement and its future catalysts.
ETH Recent Gains Tied to Decreasing Supply and Staking Demand, DeFi Popularity and Proof - of - stake Burn Mechanism
Although on 6 February ETH gained by 29.7% it failed to break above the $3,000 price level, a critical resistance zone. However, the data available in the fourth week of February indicated that ETH has the potential to trend above the $3,000 level and possibly enter a bull run.
Basically, after the number one altcoin broke above $2,900 the market became uncertain if it would overcome the resistance at the $3,000 level which analysts believe is a brick wall for an Ethereum price rise. Therefore, the crypto market anticipated the coin to retrace to a support structure. The good thing was that there has been very little resistance at $2,700.
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However, confidence remained in the market that the ETH price would surpass the $3,000 level and even get into an ETH bull run due to several factors such as the decrease in Ethereum supply, being driven by the demand for staking. The ETH supply may as well shrink as a result of the network’s proof-of-stake burn mechanism.
In fact, ETH enthusiasts also anticipate that an Ethereum season will come in the near future. As a result, some Ethereum investors are holding onto ETH anticipating higher price at the right time, considering that there are several expected upgrades on the blockchain that may increase the coin’s demand.
Source: x.com
As the screenshot indicates, Ryans Adams, a crypto analyst and enthusiast, expects the ETH demand and price to rise as a result of staking and restaking of the coin. The expansion of the DeFi eco based on the Ethereum network will also likely increase the demand for ETH which may contribute to a possible Ethereum price surge.
Once the Ethereum price surges above $3,000 the market anticipates it to break above the $3,300 resistance level, positioning itself for the next Ether bull run. The other price levels that usually offer stiff resistance to an Ethereum price surge are $2,950 and $2,975.
On the other hand, once ETH rises above $3,000 it may get strong resistance at $3,065, $3,185, $3,220, and then $3,300.
Ethereum Price Catalysts as we Move towards the Dencun Upgrade
There are several factors that are likely to affect the Ethereum price in 2024, including an increase in staking, the upcoming Dencun Upgrade, ETH ETFs and a decrease in its supply. The Bitcoin halving may also affect the ETH price due to their correlation.
Decrease in Ethereum Supply: During a 30-day period that ended on 24 February the Ethereum circulating supply decreased by 18,960 ETH while beginning from 15 February there has been a preference for net withdrawals. The next diagram gives a summary of Net ETH transfers to exchanges, indicating a rise in selling pressure.
Ether Net Transfers to Exchanges - Glassnode
Usually, the net transfers to exchanges increase when the Ethereum holders aim to sell their coins. Nonetheless, the fact that the Ether price remained stable around $2,300 indicates that the rise in Ethereum sales was not related to a price rally.
The SEC Approval of Spot ETH ETFs May Trigger Ethereum Price Surge : We have noted that the SEC’s spot bitcoin ETF approval in January has increased the demand for bitcoin. For example, the BTC ETF issuers like BlackRock have acquired much bitcoin in a short period. The market anticipates a similar effect on the demand for ETH if the SEC approves the ETFs.
The approval of the spot ETH ETFs will likely trigger an Ethereum price rally and a possible ETH bull run. Currently, many crypto analysts have said that there is a 50% chance of SEC approval of the ETFs.
For example, Nikolaos Panigirtzoglou, an investment analyst at JPMorgan, told TheBlock that there is a 50% possibility of the SEC’s approval of ETH ETFs. The earliest expected date for the approval of spot Ethereum ETFs is 23 May.
Increase in Ethereum Future Premium: The market usually uses changes in the price of ETH futures to gauge ETH’s possible future trend. In a neutral ETH market the Ethereum futures often trade at a premium of between 5% and 10%.
Significantly, a premium of more than 10% shows that the demand for the coin may increase or remain high which influences the price of the underlying asset to rise. However, in the case of Ethereum the premium is stuck above 14% indicating a high demand for ETH.
The Ethereum Dencun upgrade: A number of upgrades lined up for the Ethereum blockchain such as the Dencun may also push the ETH price up. Dencun, the Ethereum protocol upgrade, expected on 13 March, will bring significant benefits to the blockchain such as the reduction in transaction fees.
Rise in Decentralized Finance on Ethereum: Several crypto projects have launched decentralized finance protocols on the Ethereum blockchain which may increase the demand for ETH. For instance, there has been a rise in liquid staking tokens (LRTs) on the blockchain. Ether.FI and Puffer are examples of DeFi platforms that have introduced high yield liquid staking tokens (LRTs).
Interestingly, some of the recently introduced DeFi protocols have been offering airdrops to the Ethereum community. As an example, Starknet, an Ethereum rollup, recently introduced STRK airdrop which has helped to increase the demand for ETH. These factors, among others, may lead to the Ethereum season.
Conclusion
The $3,000 Ethereum price level has provided much resistance forcing the value of ETH to remain below it for a long time. Nonetheless, there are various factors that can help to catapult the price of ETH higher. The decrease in its circulating supply, ETH restaking, Dencun upgrade and the rise in DeFi on the Ethereum blockchain may lead to an increase in the value of the coin.
FAQs about Ethereum
How much will 1 Ethereum be worth in 2025?
The price of Ethereum is likely to fluctuate between $7,035 and $7,283 in 2025. The prevailing macroeconomic conditions and the regulatory environment may influence its price movement.
Why is Ethereum going up?
The increase in staking demand, the up-coming upgrades, and the increased adoption of DeFi is pushing the price of ETH up. The general crypto market bullish outlook and the Bitcoin price also influence the ETH’s price.
