ETH Finally Strengthens, Is $4000 Just A New Starting Point?

[TL；DR]:

Since Trump’s re-election as president, Ethereum has shown a stronger performance compared to Bitcoin, attracting increasing investor allocation and rising to the important resistance level of $4,000. After adjustment, it is expected to further rise.

With the rise in Ethereum prices, tokens in sectors such as L2 and DeFi have rapidly increased, and the total market cap of Ethereum tokens has increased to $571.3 billion.

The conversion of spot ETFs to net inflows indicates a shift in investors’ attitudes towards Ethereum from indifference to optimism, demonstrating a strong interest in Ethereum among investors.

Introduction

Recently, the price performance of ETH has been remarkable, successfully breaking through the psychological barrier of $4,000 and showing a stronger trend than BTC in the market. Has the once decadent ETH started a fierce counterattack, and can the future price of the currency drive the counterfeit season? This article will explore it in detail for you.

ETH Rises to $4,000, Sector Tokens Rotate Upwards

Since Trump’s re-election as president, the crypto market has shown an upward trend, with the Ethereum sector performing particularly well. According to Gate.io data, the price of Ethereum quickly rose after the US election and has successfully broken through the important resistance level of $4,000. This increase not only significantly boosted the market value of Ethereum but also gave investors confidence in its future.

Source: Gate.io

Compared to BTC, ETH has started to show strong performance recently. From the perspective of the ETH/BTC exchange rate pair, this value has finally stopped falling and rebounded recently. The MACD indicator has just hit a low golden cross and is expected to rebound further in the future. This change indicates that investors have become more proactive in their risk appetite after Trump’s election, and have gradually realized the high investment value and potential of ETH.

Source: Gate.io

According to market analysts’ predictions, Ethereum’s rise results from its consolidation within a three-year upward triangle pattern, approaching a new “paradigm shift.” For example, analyst VentureFounder has stated that Ethereum may repeat the impulsive breakout of 2016-2017 and is expected to reach its price target of $15,937 by May 2025.

In addition, the tokens in the Ethereum sector are also showing an overall upward trend. As the price of Ethereum rises, L2, DeFi, liquidity staking, re-staking, and other sector tokens have rapidly risen. According to the latest data from CoinMarketCap, the total market cap of Ethereum tokens has risen to $571.3 billion, with Render (RENDER), Mantle (MNT), JasmyCoin (JASMY), Ondo (ONDO), Sandbox (SAND), Beam (BEAM) leading the way in the past 7 days.

Source: 8marketcap.com

Spot ETFs Turned into Net Inflows, and On-chain Trading is Becoming Increasingly Active

Behind the rise in ETH prices, there is an emotional transmission that BTC’s impact of $100,000 has warmed up the overall environment. Of course, we can also see from the flow of funds in spot ETFs that the market’s attitude towards ETH is shifting from indifference to optimism.

According to the latest data, the Ethereum spot ETF has had a net inflow for ten consecutive days, with a total inflow amount of $1.4 billion. The inflow of two days reached a new high since its launch in July. Especially on December 3rd and December 5th, the daily net inflows reached $133 million and $428 million, respectively.

Source: coinglass

The trend has led to a total net asset value of $13.358 billion for Ethereum spot ETFs, accounting for 2.74% of Ethereum’s total market cap, demonstrating strong investor interest in Ethereum. As Nate Geraci, President of The ETF Store, said, advisors and institutional investors are just beginning to monitor this field.

Source: @NateGeraci

How Much Space for Imagination Is There After $4,000?

From the historical highs of BTC and SOL, it can be seen that although ETH has shown relatively strong performance recently, it has not yet reached its highest price in history and still needs to continue to make efforts, which cannot be achieved without many factors such as regulatory environment, eco construction, and technological innovation.

Firstly, after Trump’s re-election as president, his relaxation of crypto policies and increased support will positively impact the Ethereum eco.

The Trump administration is expected to introduce more policies and regulations conducive to developing the crypto industry, including reducing compliance costs, introducing more cooperation and applications, etc. This will undoubtedly provide more opportunities for Ethereum in practical applications, as evidenced by the recent popularity of a series of compliant protocols such as ONDO and XRP.

Secondly, the Ethereum eco is still actively under construction. This bull market not only gave birth to innovative concepts such as re-staking, L2, and RWA, but also achieved innovation in fields such as DeFi and GameFi. Especially with the continuous development and improvement of the DeFi field, Ethereum is expected to further consolidate its leading position in innovative crypto applications. According to look-on-chain data, Ethereum’s TVL has increased by nearly $7.8 billion in the past 7 days, a growth rate far greater than Tron and Solana.

Source: @lookonchain

As Justin Drake, a researcher at the Ethereum Foundation, recently pointed out in an article, the technology of Ethereum Layer 2 is constantly maturing and is expected to significantly improve Ethereum’s performance. It can be foreseen that the upcoming Prague upgrade and Electra consensus layer upgrade in the first quarter of next year will further enhance the performance and user experience of the Ethereum network while bringing about a new wave of narrative hype.

In fact, we have repeatedly discussed the breakthrough difficulties ETH faced in our past blog articles, pointing out that the low price of the currency is only a temporary respite. Currently, from a technical perspective, Ethereum’s price is indeed facing some downward pressure in the short term after breaking through $4,000. However, based on the overall development trend, with the spread of market optimism and an increase in external capital inflows, the price of Ethereum is expected to be subject to greater game discoveries in the coming months.