Ethereum, the second-largest cryptocurrency by market capitalization, is trading at $2,420 Following a recent price rally, Ethereum is up 3.4% and 6.3% over the past 24 hours and seven days respectively, raising hopes for an extended bull run. As the price performance continues to unfold, a few major developments are taking hold that could pave the way for Ethereum price to rise above the $4,000 mark again.
Stablecoin transaction volume hits a new record
Despite the bearish sentiment that has persisted over a 30-day period, on-chain data shows that the Ethereum blockchain continues to witness massive activity, especially in the stablecoin niche. The stablecoin trading volume on the blockchain spiked massively in August to break its previous all-time high. Notably, the stablecoin trading volume reached $1.46 trillion.
This surge in stablecoin activity further cements Ethereum’s position as the go-to blockchain platform in the DeFi world. As stablecoin adoption continues to increase, this could Increase Ethereum revenue due to the demand for ETH tokens used to pay transaction fees. This increased utility could, in turn, contribute to its price reaching $4000 or more.
Beware of the 0.015 points in financing rates
Another key factor to watch now for Ethereum What is the financing rate?The funding rate is a metric that tracks the cost of holding a long or short position in the perpetual futures market. Funding rates reflect market sentiment, as positive funding rates indicate that long positions are paying off short positions, suggesting a bullish outlook, while negative rates show a bearish bias.
According to CryptoQuant on-chain data, Ethereum’s funding rate is approaching the 0.015 point. As CryptoQuant analyst pointed outCurrently, Ethereum’s funding rate is hovering between 0.002 and 0.005. This movement is reminiscent of a pattern from September 2023, when the funding rate was similarly low.
While these figures may seem modest for a typical bull market, one CryptoQuant analyst has noted that this could be the lull before a major bullish move. This is because funding rates finally crossed 0.015 in 2023, allowing Ethereum to “rise from the $1,500s to $4,000s.” A similar situation could see Ethereum massively rally to $4,000 in the coming months.
Ethereum: Network Growth
According to Santiment, the Ethereum network has seen massive growth over the past week and recently hit a four-month high. In addition to its L2 solutions like Optimism and Arbitrum, the platform remains the foundation for decentralized finance (DeFi) and non-fungible tokens (NFTs). This network growth was accompanied by an increase in the creation of wallet addresses and active addresses.
At the time of writing, Ethereum is trading at $2421. If these factors align in Ethereum’s favor, we could see ETH keep getting closer the $4,000 mark.
Featured image from StormGain, chart from TradingView
Disclaimer
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.