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Ether’s price is trending upward, signaling potential gains as network activity surges and a classic bullish chart pattern emerges.
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With Ethereum’s recent price movements and rising transaction counts, analysts believe a breakout to $4,000 is increasingly likely.
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“High utilization periods indicate growth in network activity—an essential factor driving Ethereum prices,” remarks a COINOTAG analyst.
Ether’s price is poised for a 56% rally to $4,000, bolstered by increased network activity and a bullish technical setup.
Ethereum’s Transaction Fees Rising Signals Bullish Trends
The recent market recovery, sparked by Bitcoin’s ascent and improved economic conditions, has propelled Ether’s (ETH) price to an eight-week high of $2,734, exhibiting a nearly 56% rise from its low of $1,750 recorded earlier this month.
This significant price movement reflects a healthy increase in on-chain activity, with Ethereum’s daily transaction count seeing a remarkable 37% uptick in the past month. These transaction levels echo the activity seen in January 2024, following the excitement surrounding US-based Bitcoin ETF approvals that previously lifted ETH prices above $4,000.
Ethereum’s daily average transaction fees have also surged, achieving a 90-day high of 0.0005 ETH ($1.33) on May 22.
Such spikes in transaction counts and fees indicate a blossoming user base engaging more deeply with Ethereum networks, whether for decentralized finance (DeFi), non-fungible tokens (NFTs), or various decentralized applications (DApps). This heightened network activity typically correlates with increased market confidence.
Historically, Ether’s price has surged during extensive utilization phases. For instance, back in the 2021 DeFi boom, fees rose to as much as 0.015 ETH due to elevated demand, further validating the notion that high fees can symbolize bullish sentiment and increased demand for ETH as gas, which in turn fuels its price higher.
Growing Total Value Locked (TVL) Fuels ETH Bullishness
Evidencing this trend, the total value locked (TVL) in Ethereum’s smart contracts has ascended to $65.3 billion as of May 23, up from $45.26 billion on April 22—an impressive increase of over 44% within just a month.
This rise is supported by notable individual protocol growth, such as Pendle’s deposits soaring by 51% and Ether.fi and EigenLayer experiencing significant growth of 48% each. Ethereum consistently leads the TVL metric, commanding a market dominance of 54%, starkly outperforming Solana’s 8% and BNB Chain’s 5%.
Furthermore, over the same period, US-listed spot Ether ETFs have recorded $249 million in net inflows, augmenting demand and providing additional tailwinds to Ethereum’s upward momentum.
Technicals Indicate Ether’s Price Could Hit $4,000
On the daily chart, ETH has established a bull flag chart pattern, exhibiting bullish characteristics after consolidating within a down-sloping range following a preceding price surge.
This bull flag indicates a potential price resolution, wherein Ethereum could target above $4,000—an increase of 56% from its current levels, following a breakout above the upper trendline at roughly $2,550.
According to crypto analyst Michael van de Poppe, holding the $2,400 support is crucial for fostering confidence in Ethereum’s journey toward $3,500 and beyond.
Moreover, as previously reported by Cointelegraph, the prevailing upward trend in Ether’s price could aim toward $3,600 this month if key support levels are maintained.
Conclusion
In conclusion, Ether’s recent performance and bullish indicators underscore a promising environment for potential growth. With rising transaction volumes and a significant increase in total value locked, the market appears poised for a rally toward $4,000. As always, keeping an eye on critical support levels will be essential for investors looking to navigate the current landscape.
