Ethereum is going through a very active period at the moment, as the crypto ecosystem is navigating a time of remarkably strong rallies. Earlier this year, the ETH-based exchange-traded funds finally received the green light from regulators, but these factors didn’t cause the price to climb a significant amount. However, most investors and analysts currently believe the altcoin is on the brink of an imminent breakout, with the most obvious indicator being its strong correlation with Bitcoin’s four-year halving cycle.
And, of course, there’s also the potential for serious price gains as a result, which is all the more reason for investors to look forward to the ETH-backed exchange-traded funds. Right now, researchers believe that an official approval has the potential to bring at least $45 billion in inflows during the first twelve months, a move that would naturally get prices to a higher level. As a result, they’re looking into how to purchase Ethereum faster and more efficiently.
$8,800
Many investors believe that Ethereum is set to enjoy a really strong rally very soon and that the full scope of its effects will become obvious as early as the first quarter of 2025. The most likely prick point many consider in this regard is the $8,000 area, with $8,800 being possible as well. It might sound highly unlikely, given that Ethereum is still considerably lower than $5,000 as of December 19th, but substantial price appreciation is nothing new for this ecosystem. One of the most clear indicators that the marketplace is heading in that direction is the presence of an ascending triangle on the daily chart.
This chart formation has historically been used to spot the very likely continuation of an upswing trend. Traders have been using this pattern as part of their technical analysis for years, and it is well-known among traders from all over the world. Once the breakout takes place, traders generally start either buying or selling aggressively, depending on its predetermined direction, with the aim being to increase gains and minimize losses as much as possible. Typically, the factor that confirms the breakout is a considerable change in volume, as it indicates rising interest.
Historical data paints a favorable picture as well, with the BTC halving typically bringing very high performance for Bitcoin, but after about eight months Ethereum breaks free from its underperformance streak and starts picking up speed.
Additional Factors
An additional indicator that Ethereum’s value is set to improve is the creation of new wallets. This naturally shows that investors remain interested and engaged in the marketplace. On average, December recorded the creation of approximately 130,000 new addresses on a daily basis. These figures mark a return to the eight-month high first recorded in April 2024, indicating that investors feel confident about Ethereum’s prospects and potential and are ready to engage with the market on a more substantial level once again.
Bulls are currently moving toward the all-time high levels of 2021 when Ethereum was firmly positioned in the $5,000 area. After consolidation is finished and the support level secured, it will be much easier to work towards gains that take the price to brand-new record levels. 2025 is expected to be one of the best years in Ethereum’s history, so it makes sense that the strong performance will include the market becoming more mature and reaching new peaks. As of December 17th, ETH saw a 30% increase in daily trading volume, a sign that the rally enjoys significant momentum. The reduced supply on exchange has fuelled Ether’s upside journey as well.
The most recent data indicates that balances have reached their lowest point in nearly nine years, plunging to 9.2 million coins, a decrease of about 10% compared to the last year. The net flow both to and from exchanges has been steadily decreasing since October 2023, so this isn’t a shift that happened overnight. The main reason for this is the enduring presence of massive withdrawals that have occurred across many different platforms. During the same timeframe, Ethereum’s price has also grown by more than 70%, showing a clear correlation between the two trends.
ETH whales are becoming more common, and their choice to go on an accumulation phase may actually be behind the lowering supply. Nearly 60% of all the ETH currently in circulation is located in the wallets of large investors.
The Effects
Exchange-traded funds are new additions to the crypto blockchain, but they’ve already become one of the most intensely discussed aspects of the system. The reason for that is their wide-reaching effects, with seemingly no fundamental aspect of cryptocurrency left unchanged by their arrival. Decentralized finance solutions, a project Ethereum has pioneered, recently returned to the highest level it has had over the past two years, reaching $117 billion. Approximately 60% of that is locked on the Ethereum blockchain.
Layer-2 blockchains, solutions designed and launched to enhance the scalability of the Ethereum network and which operate on top of the main blockchain, are also approaching an all-time high level. According to the latest figures, their collective total value locked is around $47 billion. If the ETFs are officially approved and released on the market, this trend will naturally continue and bring further growth, making history within the cryptocurrency environment.
The ETFs also provide the blockchain with an extra layer of legitimacy, which will naturally attract a broader range of investors. Many of them might have felt reluctant to approach this market due to the uncertainties and volatility that have become so closely associated with it, but the rise of exchange-traded funds might assuage their worries and get them to buy, sell, and trade. The change in investing pace will also change the Ethereum landscape, building its reputation as an investment asset rather than a token with little to offer other than technical novelties.
Ethereum is experiencing a transitory period at the moment, but most investors are confident that by the time it is finished, the prices will be the best they have been in a long while. Protect your portfolio during this time to guarantee that your revenue stream remains consistent and that you won’t struggle to patch up massive losses in the long run.
Ben Austin is the founder and CEO of multi-award-winning digital marketing agency Absolute Digital Media. Ben loves to write and share exclusive insights into the world of digital marketing from his own eyes.
