What’s powering Ethereum’s (ETH) new all-time high of $4,400?
The meteoric rise of Ethereum (ETH) is one for the record books. The surge in price over last week has been largely attributed to a bullish market sentiment, but many believe that there’s more than meets the eye behind this digital currency — and it might be blockchain potential.
Ethereum (ETH) is the second largest cryptocurrency in the world. It has experienced an all-time high of $4,400. What could be powering this new price? Read more in detail here: ethereum risks it all.
This morning, Ethereum briefly traded over $4,400, breaking above its previous all-time high of $4,390, before collapsing to $4,313 due to resistance.
At press time, ETH is trading above its 34-period exponential moving average, with higher lows and higher highs, indicating that the bullish trend from the $3,000 mark is still intact.
TradingView image of ETH/USD.
The rise of Ethereum is fueled by both technical and fundamental factors.
At press time, the network was worth at over $511 billion, with significant fundamental and technological advancements leading up to today’s milestone.
The deflationary EIP-1559 proposal and the ETH 2.0 staking functionality, both of which became live in the last two years, are on the technical side. When an Ethereum transaction is completed, the former burns a portion of the network fees, while the latter is part of the network’s transition to a proof-of-stake consensus architecture.
According to reports from earlier this year, Ethereum has gained traction within the financial community. Others analysts predict that Ethereum will reach $5,000 before 2022, with some even predicting a $25,000 price objective for the currency in 2025.
Service of a custodian and a clearing house Last month, Copper said that the growing usage of DeFi apps and non-fungible tokens (NFTs) was assisting Ethereum in overtaking Bitcoin among institutional investors.
“Rather than merely being a commodity, ETH has evolved into a yield-generating asset that can be locked for an interest rate and used to finance financing,” said Fadi Aboualfa, Copper’s Head of Research.
“Despite the network’s persisting congestion challenges, institutional investors have been captivated by Ethereum’s ingenuity.” The Ethereum network is definitely the most used in the whole crypto world, from stablecoins operating on top of it to the countless DeFi and NFT initiatives,” he continued.
ETH is being burned.
The deflationary design’s effects are on full show. According to data from Ethereum tracker WatchTheBurn, approximately $2.8 billion worth of the currency has been shaved off in the last few months, permanently removing over 669,000 Ethereum from circulation.
When compared to Bitcoin, which has a fixed supply of 21 million and no deflationary mechanisms, such market dynamics offer a hot bet: constantly dropping supply and increasing demand means substantially higher pricing for Ethereum in the future.
Despite such safeguards and billions of dollars invested in a variety of DeFi protocols, critics persist. The issue of Ethereum’s gas fees persists—gas may cost more than $500 during periods of network congestion—and transaction speeds remain poor at 13 tps. Competitors such as Solana, Polkadot, and even Cardano are taking advantage of this by offering significantly quicker networks for pennies on the dollar.
The Ethereum bet, on the other hand, will continue until then.
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Ethereum (ETH) has been on a tear lately, and is currently sitting at an all-time high of $4,400. The price of Ethereum has been driven up by the hype surrounding its new scaling solution, Metropolis. Reference: ethereum price prediction.