Strongest Ethereum Cycle Hypothesis Explained
In the world of cryptocurrency, Ethereum (ETH) is making headlines as it continues to climb in value. Here's a rundown of the latest developments:
Ethereum's price has seen a significant increase, with the digital currency currently trading at $4,603—a gain of over 7% compared to this time last week. This upward trend has been accompanied by a decline in exchange inflows, easing selling pressure on Ethereum.
The optimism surrounding Ethereum's future price is palpable on prediction market Myriad, owned by Decrypt's parent company DASTAN. A growing number of users believe that Ethereum will surge to $5,000 before pulling back to $3,500. This sentiment has grown from about 61% at the start of the week to 73% at the time of writing.
The surge in Ethereum's price is also being attributed to an increase in institutional demand. CryptoQuant Head of Research Julio Moreno compares this trend to the trajectory of Bitcoin post-ETF approval, suggesting that this institutional endorsement provides a robust long-term tailwind for Ethereum's price and perceived legitimacy.
Moreover, the synchronized accumulation of Ethereum indicates that it is increasingly viewed as a long-term strategic asset by large capital allocators. This is further evidenced by the total ETH open interest, which now sits at $62.45 billion, according to crypto analytics platform CoinGlass.
The increase in Ethereum's price is also linked to the growing demand for Non-Fungible Tokens (NFTs) on the Ethereum blockchain. Despite no major institutional buys of Ether being reported in recent weeks, Galaxy Digital has been buying large amounts of Solana (SOL). However, the current price increase of ETH is being supported by the further rising demand in connection with the NFT hype, as almost all NFTs are based on Ethereum and transactions and purchases of NFTs are paid in ETH.
CryptoQuant also reports a surge in staking activity, including one whale moving $645 million in ETH specifically to stake it. This increased staking activity is another factor contributing to Ethereum's price increase, according to Moreno.
In addition, Ethereum is approaching historically significant price resistance, as reported. Futures traders are feeling more certain of where ETH could be headed, with open interest in Ethereum futures and options contracts increasing by 3.4% in the past day.
As Ethereum continues to surge, it remains to be seen whether it will reach the predicted $5,000 mark. However, the current trends suggest that Ethereum is poised for its strongest cycle yet, according to CryptoQuant.
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