March 2024: A Month of Remarkable Events
The price of Ethereum reached a peak of $3,500 on February 29, resulting in a remarkable monthly gain of 56%. Market supply trends indicate that the price could continue to rise and potentially reach $4,000 in March 2024.
In February 2024, Ethereum outperformed other major cryptocurrencies such as Bitcoin, Solana, and Cardano, dominating the price charts. On-chain analysis of key data trends suggests that Ethereum is well-positioned for another bullish price performance in March.
One factor contributing to Ethereum’s price growth in February was the successful testnet execution of the Dencun upgrade and the increasing interest in Ethereum ETF filings. These bullish catalysts have had a lasting impact on investor sentiment, potentially leading to further price increases in the first quarter of 2024.
One notable trend is the shift in Ethereum stakeholders’ investment horizon, with a preference for long-term investment and passive income yield rather than short-term profit-taking. This is evident in the decline of Ethereum held on crypto exchanges and trading platforms. The exchange reserves have decreased significantly from 14,433,873 ETH at the end of January to 13,770,551 ETH at the end of February, indicating that investors have transferred $2.3 billion worth of ETH from trading wallets to long-term storage and staking contracts. This reduction in exchange reserves means that there is now less ETH available for trading on the spot markets.
Ethereum offers various opportunities for investors to earn yields, which may incentivize them to hold onto their ETH instead of selling early. With the increasing demand for liquidity staking derivatives and the upcoming Dencun upgrade that is expected to improve transaction throughput, the supply of ETH in the market is likely to decrease further in the coming weeks. If market sentiment remains positive, this scarcity could drive the price of ETH towards $4,000 in March 2024.
Another indication of Ethereum’s bullish outlook is the growing number of new users joining the Ethereum network. In February, the network welcomed 1.84 million new funded wallets, bringing the total number of holders to 115.5 million addresses. This increase in funded wallets demonstrates the increasing retail adoption and the influx of fresh capital into the Ethereum ecosystem. In comparison, the number of Bitcoin wallet holders decreased by 70,000 in February, further highlighting Ethereum’s strong market position.
Considering the growing demand from newly-funded ETH addresses and the decline in exchange supply, the market conditions are favorable for Ethereum’s price to advance towards $4,000 in March 2024. However, the bulls will need to overcome the major resistance sell-wall at the $3,550 level in the short term.
In summary, Ethereum’s price performance in February and the positive on-chain data trends indicate that the price could continue to rise and potentially reach $4,000 in March 2024. However, there are resistance levels to overcome, and a drop below the $3,000 support could shift the market sentiment. Nonetheless, the overall outlook for Ethereum remains bullish.
