Investor Optimism Fuels Ether's Drive Towards Breaking the $2,500 Mark
Summary:
Ether (ETH) has recently been testing $2,400 resistance but did not succeed. However, investors are now optimistic about surpassing this figure for the first time since May 2022, right before the Terra ecosystem crash. This optimism is seen despite the steady performance of Bitcoin (BTC) and BNB (BNB). Several factors, including the expected ETF approval and the increased demand of decentralized applications (DApps) on the Ethereum network, suggest a potential push for Ether beyond $2,500. Considering further Ethereum’s unparalleled protocol fees and the potentiality of the 'DenCun' update, professional traders remain bullish, indicating that Ether could indeed break the $2,500 resistance.
On December 9, Ether (ETH) nearly reached the resistance level of $2,400 but fell short, causing a retest of the $2,120 support threshold. However, investors are now optimistic about surpassing this hurdle and pushing into price ranges unseen since May 2022, ahead of the Terra ecosystem crash. On December 22, Ether saw a 4% escalation, while Bitcoin (BTC) and BNB (BNB) stayed relatively steady.
While many attribute the cryptocurrency market's recent boost to the impending exchange-traded fund (ETF), there are other elements fortifying Ether's ascendance that could potentially push it beyond $2,500 before the suspected approval of the ETF in mid-January. There's also a chance the United States Securities and Exchange Commission (SEC) could delay its decision until March.
The activity involving decentralized applications (DApps) on the Ethereum network is a reliable indicator of Ether's demand. Rather than speculating on future trends in the ever-evolving world of cryptocurrency, it would be more appropriate to evaluate recent developments in DApp volumes associated with nonfungible token marketplaces, games, layer-2 bridges, and social networks.
Over the past week, Ethereum DApp volumes peaked at $27.8 billion, representing a 14.2% rise from the preceding week. This growth results from a 21% increase on Uniswap and a 52% rise in Balancer's volumes. Simultaneously, the BNB Chain and Arbitrum only recorded figures of $4.5 billion and $5 billion respectively. Interestingly, Ethereum was the sole blockchain that witnessed a volume surge within this seven-day period.
Moreover, Ethereum's protocol has an unrivaled edge with its $95.4 million in fees accrued over the last week, excluding Bitcoin, a non-competitor in the DApp space. These numbers showcase significant potential for amplified activity post any future updates, such as the much-anticipated 'DenCun' update in January intended to elevate processing speed and cut down costs.
The eventual approval of the Ether spot ETF will give Ether considerable regulatory superiority over other cryptocurrencies. Other competing cryptocurrencies have only seen trivial mentions in recent legal incidents involving exchanges accused of delivering securities brokering without appropriate registration.
Big investors and market makers' stance on Ether derivatives is crucial for other investors to consider. The Ether futures premium, which calculates the variance between two-month contracts and the spot price, has climbed to its highest point in over twelve months.
Contemplating the network activity of Ethereum, Ether investors shouldn't buckle under pressure from rival cryptocurrencies gaining traction until these competitors offer tangible competition in terms of volumes and deposits. The bullish stance of professional traders on ETH derivatives, despite Ether's price being close to its highest since May 2022, indicates that investors are hopeful that Ether can surpass the $2,500 mark.
The information present in this article is not investment advice or recommendation. Every investment or trading move involves risk, and readers should proceed with proper research before making a decision.
Published At
12/23/2023 8:30:00 PM
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