Ethereum ETH/USDthe second largest cryptocurrency by market capitalization, reached the $4,000 mark on Friday.
What happened This price increase can be attributed to several key factors that highlight the growing strength and potential of the Ethereum ecosystem.
One of the main drivers of Ethereum’s uptrend is the decreasing supply of tokens available for trading on exchanges. Data from Glassnode reveals a 20-month low in ETH balances held on exchanges, indicating that investors are moving their tokens into self-custodial wallets.
This suggests a further long-term bullish outlook and reduced selling pressure.
Price Action: According to Coinbase, Ethereum hit $4,000 at 10:30 a.m. ET on Friday. The cryptocurrency is up 2.6% over the past 24 hours, falling just below the $4,000 mark at the time of publication.
Further reinforcing this narrative is the rise of large investors, often referred to as “whales,” accumulating significant amounts of ETH.
Glassnode data shows a steady increase in wallets holding more than $100,000 worth of ETH since February, signifying whales’ confidence in the cryptocurrency’s future.
Additionally, Ethereum staking numbers have seen a substantial increase, with over $31.58 million worth of ETH, worth approximately $119.8 billion, now staked Lighthouse chain.
This staking activity represents approximately 26.3% of the total supply of ETH that is locked up by the market, further limiting the available supply and potentially driving prices higher.
Adding fuel to the fire is the growing popularity of liquid staking solutions such as Lido AND Missile pool.
These platforms allow users to stake even smaller amounts of ETH and participate in the network validation process, increasing overall participation and decentralization.
The derivatives market has also reflected bullish sentiment for Ethereum in recent weeks.
Open interest in ETH futures contracts has increased in recent weeks, approaching levels last seen in November 2021.
This indicates an increase in leveraged positions by investors betting on further price increases.
What’s next: Looking ahead, the potential approval of an Ethereum spot ETF could provide a significant boost to the price.
Such an ETF would allow traditional investors to gain exposure to Ethereum without the complexities of directly acquiring and owning the cryptocurrency.
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