On-chain activity is heating up, institutional funds are pouring in! Analysis: Ether is ready to take a rocket and soar to "this price"

With the continuous strong demand for Ethercoin from institutions, on-chain activities are becoming more active. Analysis company CryptoQuant predicts that Ethercoin prices may usher in a new strong uptrend, and even have the potential to break through the $5,000 mark.

Supported by supply and demand dynamics, the target price aims at $5,000

CryptoQuant analysts pointed out that the current 'supply and demand dynamics' of Ethercoin show strong price support. If this trend continues, Ethercoin is likely to break through $5,000.

The analysis mentions a key indicator - 'Realized Price Bands', which is the historical average price of Ethercoin, currently with an upper limit of about $5,200, which is the price range during the peak of the 2021 bull market.

With more and more buyers in the market buying Ethercoin at higher prices, the upper limit of the 'realized price band' will also rise, indicating that there is even greater upside potential for Ethercoin in this bull market.

The on-chain activity is heating up, and the destruction mechanism helps to promote deflationary effects.

CryptoQuant's analysis indicates that since 2024, on-chain Ether transactions have significantly increased, with daily transaction volume rising from 5 million in 2023 to between 6.5 million and 7.5 million.

In addition, the daily number of smart contract calls (dApp usage indicators) has increased from 5 million times last year to 6-7 million times. These data show that the ecosystem of Ether is becoming more active and prosperous, continuing to attract more users and funds.

More importantly, the active trading activity has boosted the transaction fee income of the Ether network, and these fees are further reducing the supply of Ethercoin in the market through the EIP-1559 burning mechanism, bringing a certain deflationary pressure.

CryptoQuant pointed out that since September this year, the amount of burned Ethercoin has gradually increased, and it has formed deflationary pressure on the supply side, effectively consolidating the price foundation of Ethercoin.

Institutional investment wave, strong demand for spot ETFs

At the same time, institutional investors' enthusiasm is also increasing, becoming another major driving force for the price of Ethercoin. The listed Ethercoin spot ETF in the United States recently recorded astonishing capital inflows, with ETHA under BlackRock and FETH under Fidelity performing particularly well.

On Tuesday and Wednesday this week, these two ETFs bought a total of $500 million worth of Ethercoin; and on Wednesday alone, the net inflow of funds for the Ether Blockspot ETF reached $102 million, marking a continuous positive inflow for 13 consecutive days.

Over the past 13 days, these ETFs have attracted a total of 1.95 billion US dollars in capital inflows, pushing the total assets under management to 13.18 billion US dollars, equivalent to 2.86% of the total market value of Ethercoin.

According to the CoinGecko market price, as of the time of writing, the trading price of Ethercoin is $3,867, up 1.4% in the past 24 hours.

<on-chain activity heats up, institutional funds pour in! Analysis: Ethercoin is ready to ride the rocket and soar to 'this price'.> This article was first published in 'Block Times'.