Ethereum (ETH) price continued its remarkable rally this week as demand for cryptocurrencies continued surging. The coin surged to a high of $2,260 on Monday, its highest point since May 2022. It has had a spectacular rally after bottoming at $881 in June last year.
Ethereum’s surge has also had an impact on the Grayscale Ethereum Trust (ETHE), which has over $6 billion in assets under management (AUM). The fund has moved from having a discount to Net Asset Value (NAV) to having a premium of about 2%.
This performance is primarily because most investors believe that the SEC will also approve Ethereum ETFs. While the SEC is expected to approve a Bitcoin ETF, the challenge is that the agency views Ethereum as a financial security because of its staking features. As such, it might reject an ETH ETF just as it has done so for BTC several times in the past.
Ethereum and ETHE prices have jumped in line with the ongoing Bitcoin price surge. Bitcoin has rallied to over $40,000 as demand for the coin rises. Investors are waiting for the upcoming Bitcoin halving event and spot ETF approval. There is also growing optimism that the Federal Reserve will start cutting rates in the coming months.
Ethereum also has a dominant role in the blockchain industry even as competition from layer-1 networks like Avalanche and Solana rose. It is also competing with other layer-2 networks like Base, Optimism, Polygon, and Arbitrum.
Data by CryptoSlam shows that the total sales of Ethereum NFTs jumped by 120% in the past 24 hours to over $24 million. Solana sales came in second at over $5 million while Mythos Chain stood at over $793k. The number of Ethereum buyers dropped to 10,346 in the same period.
Ethereum also has a dominant market share in Decentralized Finance (DeFi) as its total value locked (TVL) has jumped to over $27 billion and its stables hit over $66.5 billion. It generated over $9.1 million in fees in the past 24 hours.
Therefore, the outlook for Ethereum is likely strong since it has the biggest market share in key industries like DefI, gaming, and NFTs.
There are also positive fundamentals that could push ETH price much higher. US inflation has retreated, leading to many analysts to predict that the Fed will start cutting rates in the first half of 2024. Also, the crypto fear and greed index has moved to 75 while the US dollar index has retreated.
Ethereum price forecast
Turning to the daily chart, we see that the ETH price has been in a strong bullish trend in the past few weeks. The coin has risen in the past five straight days and managed to cross the key resistance point at $2,140, the highest in April and November.
Ethereum price is being supported by the 50-day and 100-day Exponential Moving Averages (EMA). Oscillators like the Relative Strength Index (RSI) and Stochastic have all pointed upwards, pointing to high momentum.
Therefore, the outlook for Ethereum price is bullish, with the next level to watch being at $2,500 followed by $3,000.
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