Ethereum’s price surges as technical data suggests massive move on the horizon
ETH's weekly profits currently stand at an impressive 24.8%.
- As a result of the recent London Hard Fork, the total number of ETH being burned has continued to increase, effectively reducing the token's supply pool.
- ETH volumes across centralised trading platforms have continued to dip over the last year.
- Despite all of its recent positive price action, Ethereum's monthly gain/loss ratio stands at -11%.
Following closely on the heels of Bitcoin, Ethereum has been able to garner an increasing amount of financial traction since the start of October, with the altcoin rising to a relative high of AUD$4,850 yesterday before showcasing a slight correction in its value. At press time, ETH is trading for $4,800.
A number of technical and fundamental indicators suggest that ETH has the potential to accrue gains of up to 100% in the near term. For example, since the start of October alone, Ethereum's gains have already moved past the 25% range. With the US government signalling its clear intentions to not ban crypto anytime soon, it stands to reason that investors are once again betting on digital assets like ETH and BTC as hedges against the monetary inflation that seems to be looming large on the horizon.
To put things into perspective, a recent survey revealed that over the course of the last couple of months, long-term inflation numbers among US consumers rose as high as 3% – the highest in nearly a decade. Further fanning inflation fears, Jerome Powell, chairman of the Federal Reserve, was recently quoted as saying that consumer prices may continue to hover around their current levels at least until next year.
Major breakout on the horizon for ETH?
If fractal data is anything to go by, then Ethereum could potentially see its value soar to a price point of US$13k over the course of the next 60-odd days. A fractal indicator from 2017 – that was instrumental in pushing the price of the altcoin by a staggering 7,000% – seems to be rearing its head once again in 2021, especially with ETH continuing to hold solid ground above the US$3,350 mark.
And while the notion of a 7,000% increase in ETH's value by the end of 2021 does sound quite far-fetched, the last 12 months have seen the altcoin incur sizable gains of approximately 900%.
Is Ethereum's supply squeeze real?
As highlighted by Finder previously, Ethereum recently underwent a network upgrade – dubbed the "London Hard Fork" – which resulted in a portion of ETH's network fee now being burned per transaction. This has resulted in over 448,412 ETH (around US$1.35 billion) already being taken out of the altcoin's supply pool.
With the Ethereum network making its much awaited transition to a proof-of-stake framework (PoS) by the end of next year or so, the total amount of ETH that has been locked into the ETH2.0 staking contract has risen from 11,500 in November 2020 to 7.82+ million ETH (approximately) to date.
Lastly, it is pertinent to note that ETH tokens across all trading platforms have continued to drop, with data available online suggesting that exchanges are now in possession of just 18.1 million ETH as compared to 23.73 million ETH (just over a year ago).
Disclosure: The author owns a range of cryptocurrencies at the time of writing