Ethereum has crossed the $4,000 mark for the first time since reaching its all-time high, signaling a major milestone. Bitcoin, on the other hand, has faced some volatility. Recently, the market saw a significant outflow of half a billion dollars in just 60 minutes, leading to concerns about Bitcoin’s price action. At the time of writing, Bitcoin is trading at $99,500 levels.
On The Paul Barron Network, analyst The Trading Parrot, said that Ethereum’s price surge comes after a strong bounce from support levels around $2.3k to $2.4k in September. This recent breakout feels different from previous attempts at $4K, as it’s the third time Ethereum has tested this level, and there’s hope that it will sustain above $4K this time.
Bullish Momentum and Future Targets
The excitement around Ethereum’s breakout is fueled by strong momentum, with the price pushing higher after October’s breakout. The analyst has set a target range of $6.8K to $8.5K based on Fibonacci retracement levels, especially following the market’s recovery from the 2022 bear market.
Market Factors Driving the Surge
Several factors are contributing to Ethereum’s rise, including Layer 1 revenue growth, competition from Layer 2 solutions, and the upcoming Dencun upgrade, which is expected to lower fees for Ethereum users in March 2024. Despite lower fees, Ethereum’s base layer has still generated around $10.9 million in December, indicating strong underlying demand.
Ethereum ETF Inflows and Market Timing
Ethereum’s performance is also supported by growing interest from institutional investors. The launch of Ethereum ETFs has been a game-changer, with $800 million flowing into Ethereum over the past five days alone, totaling $2.6 billion since the ETF’s launch in July. This surge in institutional inflows could be contributing to the current bullish trend.
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