After a slow start to the week, ethereum price appears to be experiencing a strong recovery in recent days. With the renewed bullish momentum, a return above the $4,000 level appears to be just a matter of time for the altcoin price.
However, the $4,000 mark is not the only goal of several investors; Traders appear to be already eyeing the all-time high $5,000 level. According to a popular blockchain company, the price of ethereum could soon surpass this milestone.
Potential eth Price Drivers to $5,000
In its latest weekly report, prominent on-chain analysis platform CryptoQuant <a target="_blank" href="https://cryptoquant.com/community/dashboard/675afb0906ecb733884286bf?utm_source=twitter&utm_medium=sns&utm_campaign=quicktake&utm_content=crypto-weekly-report” target=”_blank” rel=”noopener nofollow”>discussed the factors or drivers that could trigger a possible increase in the price of ethereum. According to the blockchain company, supply-demand and network dynamics could push the price of eth above $5,000.
Firstly, CryptoQuant highlighted renewed investor confidence and growing demand for ethereum, as seen with recent capital inflows into eth spot ETFs. US-based ethereum ETFs have witnessed substantial growth in their holdings since hitting a low of 2.716 million eth, and hit an all-time high of 3.41 million eth on Thursday.
Additionally, the pace of eth supply growth has slowed somewhat in recent months due to the increasing burn rate. According to data from CryptoQuant, the number of ethereum tokens burned through fees has been increasing since September, rising from 80 eth on August 30 to 2,700 eth at the time of writing.
On network dynamics as a potential driver, CryptoQuant noted that network activity, including total daily transactions, daily contract calls, and adoption of decentralized applications (dApps), has continued to grow in 2024. For example, the Increasing dApp usage results in more eth being burned through transaction fees, which may create deflationary pressure on the total eth supply.
Based on valuation metrics, ethereum price could be poised for a rally above $5,000, especially if supply and demand dynamics continue. For example, the upper band of eth's realized price, which served as the high in the previous bull run, is currently at $5,200.
<img decoding="async" class="aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/12/Here39s-How-Ethereum-Price-Could-Break-5000-Soon-CryptoQuant-Explains.jpeg" alt="ethereum price” width=”1199″ height=”557″/>
Source: CryptoQuant
ethereum price at a glance
At the time of writing, the price of ethereum is around $3,900, reflecting an increase of just 0.5% in the last 24 hours. According to data from CoinGecko, the price of ethereum is still down more than 3% in the weekly period.
The price of ethereum on the daily timeframe | Source: ETHUSDT chart on x/8ROi4P3P/" target="_blank" rel="noopener nofollow">TradingView
Featured image from iStock, chart from TradingView
