Key Points
- Ethereum (ETH) is predicted to cross $5,000 due to increasing demand.
- Factors such as robust on-chain activity, institutional interest, and deflationary token dynamics contribute to this prediction.
Ethereum, the crypto with the second-highest market capitalization, is building momentum. Experts anticipate a price surge above $5,000.
A recent report from The Block reveals that analytics firm CryptoQuant predicts a substantial price appreciation for Ethereum. This prediction is based on three key indicators: robust on-chain activity, rising institutional demand, and deflationary token dynamics. These factors suggest a potential for sustained growth for Ethereum.
Record High Network Activity
According to CryptoQuant, Ethereum’s network activity has seen a significant increase through 2024. Daily transactions have surged to between 6.5 to 7.5 million, up from an average daily transaction of 5 million as of 2023.
The use of decentralized applications (dApps), as indicated by contract calls, has risen to 6 to 7 million daily. This increased activity has resulted in higher transaction fees, leading to more Ethereum being burned under its fee-burning mechanism.
In September, the burn rate began to exceed the issuance of new Ethereum, creating deflationary pressure that limits supply growth.
CryptoQuant analysts have used realized price bands as a key metric to project Ethereum’s future value. This metric currently shows the upper limit at $5,200 — similar to the peak level Ethereum reached in the 2021 bull run.
Analysts predict that as new investors enter at higher price points, this upper band will rise further, indicating more room for upward movement.
Increased Institutional Interest
In addition to on-chain metrics, institutional interest in Ethereum is stronger than ever.
Spot Ethereum exchange-traded funds (ETFs), including those from BlackRock and Fidelity, have seen record inflows. Over the past 13 days, Ethereum ETFs have recorded a streak of positive flows, accumulating nearly $2 billion during the period. This brings total assets to $13.18 billion.
The significant surge in Ethereum ETF flows signals growing institutional confidence in Ethereum as a strategic investment vehicle. The ETH/BTC ratio also continues to climb, implying that investors may be shifting from Bitcoin to Ethereum as a preferred investment choice.
Ethereum (ETH) Price Surges
To further support the above claims about Ethereum’s price performance, it has gained 4.69% in the past 24 hours. This gain contrasts with Bitcoin’s 1.40% rise.
This disparity might be linked to increased trading volumes and renewed optimism within the broader crypto market.
