Ethereum opened the day today with markets slightly down, but its price structure remains firmly in the vicinity of $2,000, driven by growing institutional interest in approving crypto spot ETFs.
On-chain data show resilience for Ether, with its crypto network returning to high fees bringing a boost in validator yield on the one hand and causing a net reduction in crypto issuance on the other.
What lies ahead between now and the end of the year for Ethereum?
look at it in this article.
Summary
Ethereum’s price and the enthusiasm for a potential spot ETF for crypto
The market’s enthusiasm for a potential spot ETF in the United States is supporting the price of crypto Ethereum, which despite opening the day down today is managing to stay close to the key $2,000 level.
Since mid-October ether has flexed its muscles by matching the local April high in the 2140 area, but failing to break the level for good.
On 1 November, the fomo in the markets came to a head when the Securities and Exchange Commission acknowledged Grayscale Investment’s request to convert its trust into a marketable security on the Nasdaq stock exchange.
Gary Gensler and his team compulsorily had to voice Michael Sonnenshein’s demands because of a direct court order that had previously recognized the asset manager’s right to request a conversion of his trust.
Traders then lent a strong helping hand on 9 November, when asset manager BlackRock followed in Grayscale’s footsteps by going to further pressure the SEC and causing an immediate 12% pump in Ethereum’s price.
The positive market confidence means that many expect the U.S. federal market regulator to go along with these companies’ requests in early 2024, thus triggering the beginning of the real crypto bull run.
The overall outlook for the market’s second largest coin by capitalization appears to be all things considered positive, visually poised to support a return to the $2,500 area where Ethereum has not set foot now since May 2022.
On the derivatives markets front in the last 24 hours the amount of call options has exceeded the total amount of put options, while open interest continues to rise undaunted going close to all-time high volumes.
The trading venues where the most trading is taking place in this context are Deribit, OKX ,CME and Bybit with finally Binance closing the rankings, unable to make room against the other competitors.
Looking at the Ethereum chart we can see how prices remain above the EMA 50 on a 4-hour time frame, with the $2,000 threshold acting as a watershed between the bullish and bearish scenario in the short term.
It will be crucial to close the week above this psychological figure in order to give room for a further leg up for the crypto that may finally come to mark new annual highs.
At the moment, however, despite the positive expectations of crypto market participants, there is no confirmation of this and the bullish continuation of Ethereum’s price structure still remains only a hope.
The $1,900 level in particular should be watched out for as it could cause a major slide for the decentralized currency if it is broken bearishly.
On-chain analysis of Ethereum: all the factors to analyze
On-chain data are encouraging for Ethereum and keep expectations high for a positive price forecast for the crypto, which sees it struggling right now to maintain the $2,000 per coin price.
After prices began the upward race from mid-October onward, the fees recorded on the crypto network also saw a surge, with the entire decentralized ecosystem seeing the cost of using the network rise from one moment to the next.
Specifically at the moment, fees are about 28 gwei, requiring roughly $20 to execute a swap and $35 to sell an NFT. Until a few days ago the values were at least 3 times lower.
Given the situation, the fees of the rollups that rely on Ethereum have also marked a sharp increase: the ZkSync, Starknet, Arbitrum and Base networks are the ones on which the biggest rises have been seen according to L2fees data.
All of this, although it can be seen negatively on the user experience front, is a boon for the Ethereum ecosystem, especially for its validators who can count on a boost in their profits.
Speaking of validators, we can see how crypto’s overall encouraging situation has prompted the network’s stakers to reach a new all-time high of ETH deposited on the Beacon Chain, amounting to 28.3 million coins.
Returning to the fees discussion, we see how the disproportionate increase in fees has led Ether to return to a state of deflation, with the network burning more coins than it puts into circulation on a daily basis.
Since EIP-1559, an update that mandated the burn of a portion of the fees recorded on the network, ETH has remained steadily close to the 0 level, suffering neither particular increases in circulating supply nor notable decreases.
In recent weeks, however, the situation seems to have become more interesting, with the network even seeing negative net issuances of more than 3,000 ETH in a single day.
Against this backdrop, the market’s second crypto seems to be looking more and more like Bitcoin, which, to stay on the subject of deflation, is almost ready for its fourth halving that will reduce miners’ mining premiums by 50%.
Should this situation remain unchanged for the next few months, we could quietly see Ethereum’s price rise above its current levels, with the $2,500 and later the $3,000 mark finally knocked down.
