Ethereum has shattered the $4,000 barrier, marking a significant recovery after months of subdued performance. This rally takes Ether to levels last seen in March 2024. Its breakout past the 200-day exponential moving average (EMA) signals renewed investor confidence. However, the Relative Strength Index (RSI) above 70 suggests the asset is entering overbought territory.
Several factors are driving Ethereum's impressive surge. Layer 1 revenue growth and increased competition from Layer 2 solutions highlight the network’s robust fundamentals. Additionally, anticipation surrounding the March 2024 Dencun upgrade—which promises reduced transaction fees—has bolstered investor sentiment. Despite upcoming fee reductions, Ethereum’s base layer revenue remained strong in December, generating approximately $10.9 million.
Institutional interest in Ethereum has spiked, largely fueled by the growing popularity of Ethereum ETFs. Over the last five days, these ETFs have attracted a staggering $836.7 million, pushing total inflows to $2.6 billion since their July launch. December 6 saw daily inflows of $83.76 million, with Fidelity’s $FETH ETF leading at $47.88 million and BlackRock’s $ETHA ETF contributing $34.56 million.
This inflow streak reflects institutional confidence in Ethereum’s long-term potential, especially in smart contract and DeFi platforms. Notably, the U.S. spot ETH ETF recorded a single-day inflow of $428.4 million, setting a weekly record of $752.9 million, according to Coinglass.
Ethereum’s open interest (OI) has climbed by 5.26%, reaching $27.9 billion, indicating heightened trading activity. Meanwhile, U.S. labor data showed payroll gains of 227,000 in November, reflecting a cooling but resilient job market, which may influence broader macroeconomic sentiment.
Ethereum’s breakout from a long-standing channel underscores strong bullish momentum. Analysts are optimistic, projecting targets between $6,800 and $8,500 based on Fibonacci retracement levels. The surge reflects a market recovery from the 2022 bear market, hinting at further upside potential.
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Lokesh Gupta is a seasoned financial expert with 23 years of experience in Forex, Comex, NSE, MCX, NCDEX, and cryptocurrency markets. Investors have trusted his technical analysis skills so they may negotiate market swings and make wise investment selections. Lokesh merges his deep understanding of the market with his enthusiasm for teaching in his role as Content & Research Lead, producing informative pieces that give investors a leg up. In both conventional and cryptocurrency markets, he is a reliable adviser because of his strategic direction and ability to examine intricate market movements. Dedicated to study, market analysis, and investor education, Lokesh keeps abreast of the always-changing financial scene. His accurate and well-researched observations provide traders and investors with the tools they need to thrive in ever-changing market conditions.
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