Achieves significant milestone, resulting in an impressive 13% increase in weekly gains.
The price of Ethereum has reached a significant milestone, surpassing $2,500 on February 9. This impressive surge has resulted in a weekly gain of 13%. Several factors have contributed to this bullish trend, including the increasing number of ETH coins being deposited in staking contracts, positive market sentiment surrounding the Dencun upgrade, and the potential approval of a spot ETF.
The recent launch of the Dencun upgrade on the Sepolia testnet has been well-received by market participants. This upgrade promises to enhance transaction processing capacity and reduce costs, making it more attractive to developers and users of the Ethereum DeFi ecosystem. The increased utility and adoption of Ethereum could drive up demand for ETH and subsequently increase its price.
Investors have also been actively staking their ETH coins on the ETH2.0 beacon chain. This may be a preemptive move to take advantage of the expected gains from the network improvement and potential spot ETF approval. Since the announcement of the Dencun testnet launch on January 31, investors have deposited an additional 588,866 ETH into Ethereum 2.0 staking contracts. As a result, a total of 29.8 million ETH are now locked up in these contracts, accounting for 24.7% of the total circulating supply of Ethereum.
This milestone is significant for two reasons. Firstly, increased staking improves the security architecture of the Ethereum network, which is crucial for a Proof of Stake blockchain. Additionally, it reduces the number of coins available for trading on exchange spot markets. Currently, ETH stakers receive an annualized rewards rate of 4%, which serves as a passive income incentive for more staking deposits.
Considering the bullish sentiment in the crypto markets, these factors combined could drive the price of ETH towards the $3,000 mark in the coming weeks. However, there may be a major roadblock at the $2,600 area, where a cluster of holders acquired ETH at the maximum price of $2,555. If these holders decide to book profits, it could pose initial resistance. Nevertheless, if the bulls can break through this resistance level, an upswing towards $3,000 becomes likely.
On the other hand, if the Ethereum price dips below $2,000, it could negate this optimistic prediction. However, there are 3.2 million addresses that acquired 3.4 million ETH at a minimum price of $2,259. To avoid losses, these investors may engage in frantic covering purchases, inadvertently triggering a rebound in price.
In conclusion, the price of Ethereum has reached a significant milestone, and various factors suggest that it could continue to rise. Increased staking deposits, positive market sentiment, and potential network improvements are driving this bullish trend. While there may be some resistance at the $2,600 level, breaking through it could pave the way for ETH to reach $3,000.
