Ethereum (ETH) may be on the verge of exceeding the $5,000 threshold for the first occasion, according to blockchain analytics platform CryptoQuant.
In its latest weekly analysis disseminated to CryptoSlate, the platform’s recent findings emphasize important supply-demand dynamics and network conditions that could propel this upward trend.
Spot Ethereum ETFs have experienced a significant increase in assets, indicating rising investor enthusiasm. Since their inception in July 2024, the total ETH held by these ETFs in the United States has escalated from 3. 095 million to an unprecedented 3. 41 million.
This growth follows a rebound from September 2024’s low of 2. 716 million ETH, signaling revitalized confidence in Ethereum as a feasible investment option.
The persistent accumulation of ETH by ETFs can considerably affect pricing, as substantial purchasing pressure from these instruments may generate upward momentum that could bring the asset closer to its historic highs and beyond.
Ethereum’s overall supply has achieved 120 million ETH, its peak level since April 2023. Concurrently, the burn ratewhere ETH is irreversibly eliminated from circulation through transaction feeshas consistently increased since September. For reference, the quantity of assets burnt through transaction fees has surged to over 2,700 ETH from a daily mean of 80 ETH in August.
This situation produces deflationary pressure, as the burn rate may exceed new ETH issuance during periods of intensified network activity. Moreover, the heightened utilization of Ethereum’s decentralized applications contributes to elevated transaction fees, further enhancing the burn rate.
Analysts contend that this deflationary pressure can induce a supply constriction that may foster favorable conditions for price appreciation.
Utilizing Ethereum’s realized price, which represents the average price paid by ETH holders, CryptoQuant estimates the current upper price threshold at $5,200.
This valuation aligns with the zenith of Ethereum’s 2021 bull market. Therefore, should the existing demand and supply trends maintain their course, ETH is positioned to reclaim and surpass its former all-time high.
