Ethereum Proceeds Toward New All-time High Amid ETF Demand: Will ETH Price Succeed?

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Ethereum, the crypto market’s second-largest asset by market cap, has crossed the $4,000 mark, a peak last seen in March 2024. This surge was triggered by a strong demand for Ethereum ETFs. It reflects a 65% rise in Ethereum’s price over the last month, following Donald Trump’s election as the 47th President of the United States, signaling a significant rebound after a period of lagging behind Bitcoin.

Institutional Interest Controls Ethereum Price

Ether has climbed above the $4,000 level, reaching heights last seen in March 2024 following a phase of low trading activity. Data from Coinglass shows that Ethereum witnessed total liquidation of nearly $87 million over the last 24 hours.

In March 2024, the launch of the Dencun upgrade drastically cut fees for Ethereum’s layer-2 scaling solutions, resulting in a 99% decline in Ethereum layer-1 network revenues. The reduction in fees initially led to less demand for the smart contract-based cryptocurrency. Nevertheless, by September 2024, network fees began to increase again.

Also read: Ethereum Breaks Through $4,000 Amid Growing Demand For ETH ETF

Data from Token Terminal shows that on December 5, the Ethereum base layer collected about $11 million in fees. In contrast, during the peak of fee suppression in August 2024, Ethereum’s fees were around $500,000.

The surge in Ethereum’s price is driven by rising demand for Ethereum ETFs, which saw a record daily net inflow exceeding $430 million on December 5, as reported by CoinGlass. In the last week, Ethereum ETFs have gained more than $1 billion in inflows, with BlackRock contributing $788 million of that total, as per data from Farside Investors.

Significant inflows into major Ethereum ETFs are occurring amid increasing bullish analysis. In November, Plume CEO Chris Yin explained that anticipation of more favorable crypto regulations under President-elect Donald Trump is sparking “overdue excitement” for these funds, which started trading in the U.S. in July.

What’s Next for ETH Price?

Ethereum price is currently showing a strong buying pattern, breaking through the $4K mark. Buyers are now aiming to hold the price above that level to validate further upswings. As of writing, ETH price trades at $4,016, surging over 2.5% in the last 2 hours.

The upward trending 20-day exponential moving average (EMA) at $3,837 and a positive relative strength index (RSI) suggest that the bulls currently have a slight upper hand. If Ethereum breaks above the upper boundary and closes there, it could trigger a rally potentially reaching above $4,400, with targets at $4,800.

Conversely, if Ethereum breaks and closes below the EMA20 trend line, it would signal a shift in advantage to the bears, potentially leading to a drop towards $3,500 and possibly further to $2,700. Should these support levels fail, the next critical level could be the 50-day simple moving average at $2,200.