Ethereum has served a mixed bag in terms of performance as of late. While its run hasn’t been all that bad, it hasn’t been all it could have been either, or all that crypto enthusiasts expected it to be. The $4K price point has proven to be a much more stubborn resistance level than anticipated. Despite the largely favorable context that all digital currencies have been enjoying lately, every time the leading altcoin starts to rise and gets closer to this elusive threshold, a new price correction comes along and obstructs its upward movement, keeping the asset from breaking into a full-blown bull run.
As Ethereum struggles for traction and appears unable to push above $4K, traders’ and investors’ hopes for a new all-time high this year seem to be slowly fading away. At the time of writing, the ETH coin price was standing at $3,538, with a market cap of $425.12B, while its record of $4,891 remains untouchable so far.
However, it’s not all doom and gloom for Ethereum. Some analysts believe things might take a turn for the better in the months to come, so investors might still have reasons to hope for more substantial gains and even a new record before the end of the year.
The price rally that never came
This year started on a positive note for digital currencies, with the approval of spot Bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission in January causing a lot of enthusiasm in the market and rising crypto prices across the board.
A few weeks after the official announcement, on March 14, Bitcoin managed to top its best performance and reach a new all-time high of $73,750, much to everyone’s surprise, as most were expecting this milestone to come after the halving event which took place on April 19. Unfortunately, Ethereum missed the opportunity to capitalize on the buzz created around the newly launched products and only registered minor gains.
The fourth iteration of the quadrennial reduction also brought a fresh new wave of excitement in the market, increasing interest in digital assets. Yet contrary to expectations, the halving didn’t do much in terms of price appreciation for either Bitcoin or Ethereum as the prices continued to move more or less in the same price range as before.
Then on May 23rd, the SEC made a truly surprising decision, signing off on a rule change that allowed the listing of eight exchange-traded funds tracking the live price of Ether. It was unusual for the regulator to greenlight these products so easily, given the decade-long struggle that asset managers had to endure to have their Bitcoin-based ETFs approved. Everyone naturally assumed that this would be the moment Ethereum finally broke out of its inertia and crossed the $4K barrier. While the hype surrounding the approval did push Ethereum’s price up, the asset remained below $4000 and eventually started on a slight downward path, moving further away from the coveted level.
And so, one missed opportunity after another kept Ethereum in a relative state of stagnation, making stakeholders wonder if a bull run was ever going to come.
Hopes for the future
Ethereum’s lackluster performance over the past few months might have dampened investors’ optimism with regard to the asset’s growth prospects for the year, but all is not lost according to analysts.
It’s important to point out that the SEC’s favorable decision on spot ETH ETFs is but a preliminary approval. For now, the regulator has only accepted 19b-4 forms from Nasdaq, CBOE, and NYSE, which allows them to list eight ETFs tied to the price of Ether. However, in order for these products to start trading, issuers also have to submit updated S-1 filings and receive the green light from the SEC. Although this is regarded as a mere formality, the process could take up to several months based on experts’ estimations as there is no exact timeframe in which the SEC has to give a verdict on these filings.
Therefore, Ethereum might see the biggest gains once spot Ether ETFs become available to investors and funds start flowing into them. If these novel products attract large inflows as many analysts predict (some foresee net inflows of up to $3 billion this year), then Ethereum could go on a huge price rally, above and beyond the $4K level.
This development alone might be enough to lift investor’s spirits and boost interest and confidence in Ethereum. However, there are other factors that indicate a rise might be coming for Ethereum in the weeks ahead. The fact that Ethereum’s supply on exchange platforms is at an 8-year low suggests crypto whales have been busy accumulating the asset lately. With investors more inclined to hold onto their Ether than get rid of their holdings, a significant price surge might be just around the corner.
The rise in daily Ethereum transactions also seems to point in the same direction. A higher number of transactions signals greater confidence in the Ethereum network from investors. All these factors combined paint a rather bullish outlook for Ethereum.
Final Thoughts
Seeing Ethereum miss the start so many times this year only intensified fluctuations in market sentiment. However, despite the frequent pullbacks that have kept Ethereum in place for so long, there are positive signs shaping on the horizons suggesting one should not rule out the possibility of a bullish trend for the altcoin in the upcoming months. If market conditions continue to be favorable, we could see Ethereum surpass the psychological barrier of $4K and finally reach a new all-time high by the end of the year.