CryptoQuant Explains Two Things That Will Take Ethereum Above $5,000 - Koin Bulletin

The price of Ethereum (ETH) can experience a significant increase if the current supply-demand dynamics continue.

According to CryptoQuant analysts, the on-chain valuation metrics of Ethereum and the renewed interest in Ethereum-based financial products are paving the way for the price to surpass $5,000.

CryptoQuant analysts highlighted the realized price bands of Ethereum as an important indicator in their evaluations. The realized price represents the average price at which Ethereum changed hands. The upper limit of these bands is currently at the $5,200 level, reflecting the peak of the 2021 bull run. Analysts indicate that with new buyers purchasing Ethereum at higher prices, this upper band could rise and the upward potential in the current market cycle could increase.

Movement in the Blockchain is increasing

On-chain activities of Ethereum showed significant growth until 2024. While the daily transaction numbers increased to the range of 6.5-7.5 million, this figure was around 5 million on average in 2023. Similarly, the daily contract calls reflecting the use of decentralized applications (dApps) also increased from 5 million in 2023 to 6-7 million levels.

This increased network activity has led to higher Ethereum transaction fees, resulting in more ETH being burned. According to CryptoQuant analysts, the increasing amount of Ethereum burned through transaction fees since September has created a deflationary pressure on ETH supply, strengthening the potential for price increase in the digital asset.

This growth and supply dynamics in the Ethereum network provide a strong foundation for further price increases in the current market conditions.