MEXCEthereum Price Could Reach $4,000 In March On 4 Factors Including Spot ETF
Highlights
- The Dencun upgrade, introducing proto-danksharding, is anticipated in March.
- Attention shifts to the approval of a spot ETH ETF following BTC ETF in January.
- Another break above $3,000 could spread FOMO, catalyzing the next run to $4,000.
The launch of Bitcoin ETFs in January turned the spotlight on Ethereum price, the second-largest cryptocurrency. Investors believe Ethereum has a high probability of receiving a spot ETF, especially with several proposals already with the Securities and Exchange Commission (SEC).
Despite the growing optimism, ETH clawed back some of the gains it accrued earlier this week, falling from slightly above $3,000 to $2,900. The pullback came upon increased volatility in the market, with Bitcoin (BTC) rejecting $53,000 for a sweep at $50,500.
Besides Ethereum, other altcoins such as Solana (SOL), XRP, and Cardano (ADA) also pulled back to gather more liquidity. This could account for the modest price gains in the market on Thursday.
Ethereum price is one of the most uniquely placed projects, considering its standing as the second-largest crypto, the largest smart contracts platform, and its upcoming Dencun upgrade.
This article looks at these factors and more to determine the role they are likely to play in ETH’s recovery journey in the short term.
1. The Dencun Upgrade Scheduled For March
The Dencun upgrade comprised of two separate upgrades “Deneb” and “Cancun,” is a major improvement for the Ethereum network that will increase its scalability and efficiency when implemented.
It will introduce proto-danksharding, a feature that will reduce the cost of transactions on layer 2 solutions like Polygon and Arbitrum, which are faster and cheaper than the main chain. The upgrade has been tested on three testnets: Goerli, Sepolia, and Holesky.
With the final launch expected in March 2024, Ethereum price is already showing signs of an incoming rally. The token surged to highs slightly above $3,000 this week, backing positive sentiment.
2. The Spot ETF
The approval of the spot Bitcoin ETFs has been referred to as a major development for the cryptocurrency industry. In addition to validating Bitcoin as a global mature asset, ETFs allow traditional investors who are not interested in the complexities of crypto to get exposure to BTC.
Moreover, the move opened the door to fresh speculation regarding the approval of a spot Ethereum ETF. Two years after the approval of Bitcoin futures ETF, Ethereum got its futures ETF. Experts say that the wait could be much short-term for the spot ETF.
Like Bitcoin the hype surrounding the ETF could be a major catalyst for Ethereum price in the coming months.
Recommended: Ethereum Price Rally Gains Momentum for $4000, Here Why?
3. Staking
Validators in the Ethereum ecosystem are required to stake at least 32 ETH. This condition significantly reduces the circulating supply. Ether becoming a PoS network through the Merge in 2022 allowed investors to freely stake and withdraw liquidity.
Contrary to expectations, the transition to PoS made staking even more attractive to investors, who have so far locked in $46.65 billion worth of ETH in smart contracts, according to Defi Llama.
Unlike 2022 and 2023 when Ethereum experienced a persistent drop in staked assets, 2024 is looking positive, implying that investors have a long-term bullish outlook.
An increase in staking translates to reduced sell-side pressure. Holders stake tokens they do not intend to sell in the near future, expecting the price will rise with time.
4. Ethereum Price Dons Bullish Technical Structure
Despite the correction from $3,000, Ethereum still holds above key indicators like the 20-day Exponential Moving Average (EMA). Besides, support at $2,900 stopped the decline on Wednesday, realigning ETH with the upward trajectory.
The four-hour chart shows that dips are profitable. So until support at $2,800 flips, traders may want to consider buying ETH and in the process contributing to the momentum targeting $4,000 in March or before Bitcoin halving. The Ichimoku Cloud also affirms Ethereum’s long-term bullish outlook.
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