Ethereum has consistently stood out as a beacon of innovation and progress. As investors and enthusiasts alike scrutinize the market's ebb and flow, understanding the factors that could potentially drive prices in the medium term becomes crucial. Among the myriad of developments within the Ethereum ecosystem, two landmark upgrades stand out for their profound impact on the network's security, efficiency, and overall market perception: the Dencun upgrade and Ethereum's monumental transition from Proof of Work (PoW) to Proof of Stake (PoS).
The Dencun upgrade, a pivotal enhancement to the Ethereum network, introduces a set of optimizations aimed at improving the scalability, security, and sustainability of the platform. By implementing cutting-edge technologies and protocols, this upgrade is expected to enhance the user experience significantly, reducing transaction costs and times - a key bullish factor for Ethereum's medium-term price outlook.
Moreover, the transition from PoW to PoS marks a revolutionary shift in Ethereum's consensus mechanism. This transition not only signifies a leap towards a more energy-efficient and environmentally friendly platform but also enhances network security and staking rewards, attracting a broader base of investors and users. By addressing two of the most critical challenges facing blockchain technologies - scalability and sustainability - Ethereum is poised to strengthen its position as a leading platform for decentralized applications (dApps) and smart contracts.
Another significant factor influencing the medium-term price potential of Ethereum is the broader context of the cryptocurrency investment landscape, particularly the launch of spot Bitcoin Exchange Traded Funds (ETFs) and the market's anticipation of spot Ethereum ETFs getting approved within the year. The introduction of spot Bitcoin ETFs has marked a milestone in the integration of cryptocurrencies into traditional financial markets, offering investors a more accessible and regulated means of investing in digital assets. This development has not only boosted investor confidence in Bitcoin but has also set a precedent for other cryptocurrencies, including Ethereum.
The anticipation surrounding the approval of spot Ethereum ETFs is palpable among investors and market analysts alike. Approval would represent a significant endorsement of Ethereum as a mainstream financial asset, potentially unlocking massive institutional and retail investment flows into Ethereum. The prospect of such ETFs offers the promise of increased liquidity, enhanced market stability, and broader exposure to a new class of investors seeking to tap into the growth potential of Ethereum without the complexities of direct cryptocurrency ownership.
Read also: Did Bitcoin Bottom Already?
What is Ethereum?
Ethereum, at its core, is an open-source, blockchain-based platform that revolutionizes the way we think about digital ownership, applications, and transactions. It extends beyond the concept of a cryptocurrency; Ethereum is a foundation for decentralized applications (dApps) that operate on smart contracts. Unlike traditional contracts, smart contracts are self-executing agreements with the terms of the contract directly written into lines of code. This groundbreaking technology automates and enforces the execution of contract terms, enabling trustless and transparent transactions without the need for intermediaries.
Founded in 2015 by Vitalik Buterin and other co-founders, Ethereum sought to build upon the pioneering blockchain technology introduced by Bitcoin. However, Ethereum's ambition was to create a more versatile and programmable platform. It introduced the Ethereum Virtual Machine (EVM), a powerful, Turing-complete virtual environment. This innovation allows developers to create complex applications that can perform a wide range of functions, from creating new digital currencies to deploying decentralized autonomous organizations (DAOs).
Ethereum's native cryptocurrency, ETH, serves multiple purposes within the network. It is used as a form of payment to compensate participating nodes for computations performed, as well as to pay for transaction fees and services within the Ethereum network. Beyond its utility as fuel for the Ethereum ecosystem, Ether has also become a popular investment and is second only to Bitcoin in terms of market capitalization.
Ethereum (ETH) price
The Ethereum price is trading at $3,500, and its market cap stands at above $420.4 billion. Meanwhile, it has a circulating supply of 102,078,892 ETH. Binance is the de facto exchange platform to purchase ETH. However, U.S.-based investors may want to take a look at Coinbase as well.
Ethereum price prediction 2024
From a medium-term perspective, ETH has presented a notable trajectory over the recent weeks. Analyzing the 1-week chart, the leading altcoin has shown significant volatility, with closing prices observing a sharp rise from $3,112.59 to a peak of $3,878.47, before slightly retracting to its current position.
Looking at the Exponential Moving Averages (EMAs), Ethereum's price has consistently remained above both the 9 EMA and the 20 EMA on the weekly chart, indicating a strong bullish trend. The 9 EMA has also risen together with the 20 EMA, underscoring the market's upward momentum. This is further corroborated by the Moving Average Convergence Divergence (MACD) on the weekly chart, where the MACD line has outpaced the signal line, reflecting strong buying pressure. The histogram values, increasing over consecutive periods, also suggest that the bullish momentum has been gaining strength.
The Relative Strength Index (RSI) adds another layer of insight, with readings soaring above 70 for the majority of the past few weeks. Such high values typically indicate overbought conditions, which could lead to a temporary retracement. However, the RSI has recently dipped to near 70, suggesting that while the market remains in a bullish phase, it might be stabilizing to a more sustainable level. This could give ETH a foundation to rise from in the coming months.
Given the current technical landscape, Ethereum faces immediate resistance at $3,521.91, with more formidable levels at $3,923.95 and $3,950.29. A decisive break above these levels could signal continued bullish momentum towards a new all-time high above $4,891.70. On the flip side, support levels at $3,059.37, followed closely by $2,539.01 and $2,515.65, will be crucial for Ethereum to maintain its bullish stance through the course of 2024. A break below these supports could indicate a shift in market sentiment, potentially leading to a more significant correction.
The upcoming Bitcoin halving event, a pivotal moment that reduces the reward for mining new blocks by half, is anticipated to have widespread implications across the cryptocurrency landscape, including Ethereum and the broader market. Historically, Bitcoin halving events have been catalysts for significant price movements, not only for Bitcoin but for the entire crypto ecosystem, due to Bitcoin's dominant market position and its role as a benchmark for the sector.
For Ethereum and other altcoins, the halving could lead to increased volatility and speculative interest as investors and traders realign their portfolios in anticipation of potential Bitcoin price surges. The reduced Bitcoin supply might also shift some investor focus towards Ethereum, especially considering its ongoing developments and the shift towards Ethereum 2.0, further fueling demand for ETH. Consequently, while the direct impact of the Bitcoin halving on Ethereum's fundamentals might be minimal, the broader market dynamics and sentiment shifts could significantly influence Ethereum's price action and trading volume in the period surrounding the halving event.
Ethereum price prediction 2025
Although it is impossible to predict what the Ethereum price will do in 2025, fundamental events such as the Bitcoin halving event, the Dencun upgrade and the Proof of Stake transition will most likely set the Ethereum price on a positive path heading into 2025.
The true bull market may not have happened yet, as the U.S. still tries to tackle inflation. Furthermore, the halving event is normally seen as the precursor to the last correction phase before ultimately leading to the next crypto bull run.
However, Bitcoin entering the mainstream financial market introduces a possible shift in dynamic. As institutional investors rush to purchase BTC, it will most likely result in a continued increase in the market leader’s price. This will potentially make it too expensive for retail investors to buy into the market leader and make any substantial gains. As such, the retail market could turn their focus to ETH to lead the crypto market into its next bull run before shifting capital to smaller altcoins.
Either way, ETH could set a new all-time high given the list of bullish fundamentals. In this positive scenario, the altcoin may conservatively rise 20% above its all-time high, which would place its value at around $5,870. However, in a bearish scenario, ETH may look to its previous all-time high of $4,891.70 for support if it manages to overcome this threshold in the coming months. Continued sell pressure could then bring the crypto down to the subsequent weekly support at $3,950.29.
Is Ethereum (ETH) a good investment?
Just like every other cryptocurrency, ETH is a risky and volatile investment. It is important to thoroughly assess the risks associated with investing in ETH and to never invest more than you can afford to lose. To make informed investment decisions, investors should understand the technology underlying Ethereum, as well as the various developments and initiatives being undertaken by the Ethereum Foundation and other members of the community. Additionally, it is important to research the exchanges and wallets that offer ETH and to keep up to date on the latest news and developments related to the ETH and Ethereum networks.
Bottom line
Are you ready to invest in Ethereum? Very few if any analysts forecast its value going down to zero, although you can’t be sure these days, so make sure you always do your own research before making investment decisions. And keep in mind that cryptocurrency prices can be extremely volatile, so trading crypto always involves a high degree of risk.
You can buy ETH from many crypto exchanges, including Coinbase
Disclaimer: Coinpaper does not recommend that any cryptocurrency should be bought, sold, or held by you. Always conduct your own research and consult your financial advisor before investing in any digital asset.
Frequently Asked Questions
What is the Dencun Upgrade and How Does It Impact Ethereum?
The Dencun upgrade is a significant enhancement to the Ethereum network that focuses on improving scalability, security, and sustainability. By implementing advanced technologies and protocols, this upgrade aims to significantly enhance user experience by reducing transaction costs and times. It's considered a key bullish factor for Ethereum's medium-term price outlook, as it addresses some of the network's critical challenges and improves its overall efficiency.
Why is the Transition from Proof of Work to Proof of Stake Important for Ethereum?
Ethereum's transition from Proof of Work (PoW) to Proof of Stake (PoS) represents a revolutionary shift in the network's consensus mechanism. This move is pivotal for several reasons: it significantly reduces Ethereum's energy consumption, making it more environmentally friendly; it improves network security; and it potentially increases staking rewards. These changes are expected to attract a broader base of investors and users, addressing scalability and sustainability challenges and reinforcing Ethereum's position as a leading platform for dApps and smart contracts.
How Might the Launch of Spot Bitcoin ETFs Influence Ethereum?
The launch of spot Bitcoin ETFs has been a critical milestone in integrating cryptocurrencies into traditional financial markets, offering investors regulated and accessible ways to invest in digital assets. This development boosts investor confidence in cryptocurrencies, including Ethereum, and sets a precedent for the potential approval of spot Ethereum ETFs. The anticipation of Ethereum ETFs is expected to unlock significant institutional and retail investment flows into Ethereum, promising increased liquidity and market stability.
What Role Does Ethereum Play in the Blockchain Ecosystem?
Ethereum is more than just a cryptocurrency; it's a foundational platform for decentralized applications (dApps) that operate on smart contracts. Introduced in 2015, Ethereum brought about the Ethereum Virtual Machine (EVM), allowing developers to create complex, multi-functional applications ranging from new digital currencies to decentralized autonomous organizations (DAOs). Ethereum's native cryptocurrency, Ether (ETH), is used to compensate network participants and pay for transaction fees, making it a crucial element of the Ethereum ecosystem and a popular investment option.
