Ethereum mimicked Bitcoin’s price movements, touching a new ATH beyond $4,850 on November 10. However, it suffered retracement post that, slipping around $4,635 at this publication. The crypto market surged this year, driven by the institutional interest in BTC and DeFi and NFTs on the Ethereum blockchain. The Ethereum price also secured support due to the summer hard fork, introducing asset burning to decrease supply.
Meanwhile, does Ethereum has the momentum to continue creating new peaks? Will the altcoin rise or drop in the near term? This article might answer your queries.
Ethereum Institutional Interest Surges
The United States launched the first ETF for BTC futures in October as more awaits more regulatory approval. The positive sentiment surrounding BTC exchange-traded funds spread to Ethereum. For now, market players expect Ether to follow a similar suit. Canada has multiple Ether exchange-traded funds, including Evolve ETH ETF, Purpose ETH ETF, and CI Galaxy ETH ETF.
Ethereum attained a record price peak of $4,859 on November 10 when Bitcoin rose to another all-time high past $68,000.
Ether and Bitcoin attracted amplified interest from retail and institutional investors in 2021. Moreover, exchange-traded funds made it easy for an institution to attain crypto exposure in their investment portfolios. As of October’s end, Bitcoin’s institutional inflows were $6.37 billion for YTD, while Ether’s flows stood at $1.05 billion (Kraken exchange data).
Ethereum also received a boost from smart contracts use in NFTs and DeFi. Chainalysis September’s report revealed that western, northern, and central Europe accounted for the crypto economy. Moreover, most of the institutional crypto transfers in the area went towards decentralized finance over the previous 12 months. With that, most transfers involved wrapped Ethereum (wETH), an ERC20 coin used in DeFi platforms, and Ether.
Meanwhile, NFT trading activity surged in Q3 of 2021 and continued the bullish strength during October sessions.
Dapps recorded over 2 million daily active addresses in October, 21% higher than the previous month and 626% high from 2020 October (DappRadar data). The NFT marketplace had a trading volume of $4.2 billion in October, a 2% surge compared to September, while ETH accounted for 82.1% of the overall volume. As NFTs on the ETH blockchain utilize the Ether token, activity increase leads to increased demand for the coin, supporting price increases.
The floor market capitalization by the top 100 ETH non-fungible tokens and NBA stood at $16.72 billion, an 18% upswing compared to September’s figure. Though alternative networks such as Polygon and Solana see increased adoption, ETH still leads the DeFi market as far as TVL is concerned.
Will ETH Touch $5,000 Soon?
Santiment analysts believe that Ethereum has all it takes to explore $5,000 in the near term. One of the factors holding Eth back is the network fees at $63.5, nearing its May 12 peak. ETH transactional charges, also gas fees attained the 2nd highest zone on November 9. Keep in mind that these charges were on an ATH of $70 on May 12.
WalletInvestor algo-based prediction website suggested that Ethereum can surge past $5,000 by November end and maintain in the $4,500 – $5,400 range before the year-end. Meanwhile, Gov Capital confirmed the asset might consolidate near the $4,700 mark before 2021 ends and kick-start its upswings in January. Let us wait for what the incoming sessions will have.