Ethereum Price Prediction: 3 Factors Why ETH Approaching $5,000 As ETF Hope Dwindles

Ethereum price prediction: The token powering the most prominent smart contracts ecosystem in the industry, ETH, is not slowing down the run to new highs. As Bitcoin achieved a new all-time high (ATH) of $72,710 on March 11, Ethereum price ascended above $4,000 for the first time since December 2021.

Investors are hopeful for new all-time highs this week, considering Ethereum price at $4,030. Establishing higher support above $4,000 would prop the token for the next move up amid positive sentiment and an upcoming protocol upgrade.

Beyond the generally positive market sentiment, several unique factors enhance Ethereum’s outlook. This analysis will delve into some of the key market movers and anchors investors are riding on to achieve maximum benefits from Ether in the long run, particularly in the bull market.

1. The Dencun Upgrade

What is the Dencun Upgrade?

The Dencun upgrade is a major upgrade also known as a “hard fork,” which introduces significant changes to Ethereum’s consensus and execution layers.

Notably, it incorporates ephemeral data blobs (protodanksharding) through EIP-4844, aimed at reducing Layer 2 transaction fees.

Why is it Important?

Dencun enhances scalability and efficiency, crucial for Ethereum’s growth.

It follows last year’s Shapella upgrade, building on Ethereum’s continuous evolution.

Expected Features:

Ephemeral Data Blobs: Improves transaction processing efficiency. Transient Storage Opcodes, Beacon Block Root in EVM, and other enhancements particularly on layer 2 scaling solutions whose transaction costs are expected to drop to near zero levels.

Dencun’s Long-Term Impact on Ethereum:

Dencun strengthens Ethereum’s fundamentals, making the protocol more attractive for developers and users. Investors can anticipate improved network performance, potentially positively impacting Ether’s value.

In summary, Dencun represents a milestone in Ethereum’s journey, reinforcing its position as a leading blockchain platform. For investors, this upgrade signals long-term value growth and underscores Ethereum’s relevance in the crypto space.

Now that Ethereum sits above $4,000, those perceiving the Dencun upgrade as a market move, believe the next breakout would push Ethereum to $5,000 — achieving a new ATH.

2. Market Sentiment and FOMO

The crypto market sustained a solid bullish structure since the beginning of Q4 last year. Interest in crypto assets grew exponentially as the dream for the first spot Bitcoin ETFs in the US materialized.

Bitcoin set out on a trajectory to a new all-time high, buoying the entire market. Altcoins led by Ethereum followed in BTC’s footsteps rising to new levels, some to new record highs.

The enhanced sentiment can be attributed to the Bitcoin halving in April, which will significantly shrink supply while demand continues to rise. Due to the correlation between BTC and ETH, a bullish Bitcoin often means a parabolic rally in Ethereum price.

3. Spot ETH ETF

The remarkable performance of Bitcoin ETFs is driving market participants to speculate on the potential impact of a spot Ethereum ETF on the price of Ethereum in the long run.

Several applications are already with the Securities and Exchange Commission (SEC), including BlackRock’s. However its approval is not guaranteed, especially with regulators in the US conflicted over the status of ETH — whether it is a security, or not.

If approved the flow of money into Ethereum investment products will grow drastically as witnessed with Bitcoin ETFs. Increasing demand for the token while supply holds steady or falls, could ignite a rally big enough to send Ethereum above $10,000.

Ethereum Price Prediction: Navigating The Bullish Market Structure

Ethereum holds above $4,000 a level acting as the immediate support after stalling at $4,085. Traders are expected to be looking out for several four-hour candle closes above $4,000 to validate continued movement toward the ATH.

Ethereum price chart | Tradingview

If Ether slides below the expected support at $4,000, investors can DCA from the 20-day EMA to the 50-day EMA (the blue and red lines on the chart) to maximize their returns.

A neutral Relative Strength Index (RSI) falling toward the midline (50) suggests that the short-term uptrend is waning. Therefore, Ethereum might be forced to sweep areas below $4,000 to collect liquidity ahead of the next major move targeting $5,000.

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