If current trends in supply and demand, on-chain activity, and investor interest continue, the second-largest cryptocurrency by market cap is set to experience significant price growth. This was reported by The Block citing insights from CryptoQuant experts.
“Based on valuation metrics, Ethereum could exceed $5000 if the current demand and supply dynamics persist,” noted the analysts. They observed that the upper realized value of Ethereum is around $5200, which reflects peak figures from the previous bull market.
CryptoQuant emphasized that new market entrants are purchasing Ethereum at increasingly higher prices, suggesting that this upper boundary will continue to rise, indicating further growth potential in the current cycle.
On-Chain Metrics
The analysts highlighted positive shifts in network activity. For instance, daily transaction volumes range between 6.5 to 7.5 million — up from approximately 5 million in 2023.
“Additionally, the daily number of smart contract calls — a measure of dApp usage — has climbed to 6-7 million compared to 5 million in 2023,” they added.
Increased on-chain activity has led to higher transaction fees and a growing number of tokens burned under EIP-1559.
“The growth rate of Ethereum’s supply has slowed in recent months as the amount of ETH burned through fees has risen since September, applying upward pressure on the digital asset,” explained CryptoQuant.
Institutional Demand
Spot Ethereum-based ETFs have maintained a positive daily net inflow since November 22.
The total assets under management (AUM) for Ethereum ETFs have exceeded $13 billion, with cumulative net inflows nearing $2 billion. The daily inflow for the last session was $102 million.
Some experts believe this trend indicates Ethereum’s potential to achieve new all-time highs in the near future.
At the time of writing, Ethereum is trading at around $3948. Over the past 30 days, the asset has risen by 21.7%, compared to Bitcoin’s 16.2%.
Reminder
On December 10-11, BlackRock and Fidelity collectively acquired $500 million worth of Ethereum for their ETFs.
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