Ethereum price prediction suggests a rise to $3,000 as network activity increases due to the recent altcoin frenzy, according to Markus Thielen, research head of Matrixport. Thielen believes that the recent surge in revenue for the Ethereum ecosystem, particularly from transaction fees, indicates a potential bottom for ETH and supports a bullish trade. Ethereum’s weekly revenue has risen from a yearly low of $12 million in early October to over $30 million for two consecutive weeks. Thielen sets a $3,000 price target based on technical chart patterns.
Change in Outlook for Ethereum
This optimistic outlook is a change from Thielen’s previous bearish views on ETH, where he noted declining network revenues and user activity. In October, ETH reached a 7-month low and its relative valuation against bitcoin dropped to a 15-month low. However, since then, ETH has rebounded by approximately 20% and is currently trading at around $1,870.
Increased User Activity on Ethereum
The increase in user activity on Ethereum can be attributed to capital rotation from bitcoin to altcoins. Ethereum serves as the foundation for many decentralized finance (DeFi) protocols and decentralized exchanges (DEXs). Last week, the network settled $250 billion worth of asset transfers, the highest value since the mid-March regional banking crisis and a significant increase from $105 billion in late August. This surge in activity has resulted in more ETH being burned than added to the supply, making the token deflationary after two months of being inflationary.
Improving Fundamentals in the Crypto Market
The growing on-chain activity on Ethereum indicates improving fundamentals in the crypto market, according to Lucas Outumuro, research head at IntoTheBlock. He believes that the increasing activity and inflows driven by spot trading demonstrate strong demand fueling the crypto rally.
Ethereum price prediction is bolstered by the fact that the token has become deflationary, which could further drive its value. The deflationary nature of Ethereum is a result of the increased network activity and the burning of more ETH than the amount added to the supply.
Technical Analysis Supports Bullish Ethereum Price Prediction
Technical chart patterns also support the bullish Ethereum price prediction, with Thielen setting a $3,000 price target. The recent rebound in Ethereum’s value and its current trading price of around $1,870 suggest that the potential bottom has been reached, and the market is now poised for a bullish trend.
The Ethereum price prediction of $3,000 is further supported by the increased revenue generated by the Ethereum ecosystem. With weekly revenue rising to over $30 million for two consecutive weeks, the Ethereum network is experiencing a surge in activity and demand.
Spot Trading Drives Crypto Rally
Lucas Outumuro, research head at IntoTheBlock, believes that the increasing activity and inflows driven by spot trading demonstrate strong demand fueling the crypto rally. As Ethereum serves as the foundation for many DeFi protocols and DEXs, its growing on-chain activity suggests a positive outlook for the broader crypto market.
In conclusion, Ethereum’s price is predicted to reach $3,000 as network activity and revenue for the Ethereum ecosystem continue to rise. The surge in user activity on Ethereum, driven by capital rotation from bitcoin to altcoins, has made the token deflationary. This improvement in on-chain activity suggests positive fundamentals for the crypto market, with technical chart patterns and increased revenue supporting the bullish Ethereum price prediction.
