Ethereum has crossed the $4,000 mark for the first time since reaching its all-time high, marking a major milestone. Bitcoin, on the other hand, has seen some volatility. Recently, the market saw significant outflows of half a billion dollars in just 60 minutes, raising concerns about Bitcoin’s price action. At the time of writing, Bitcoin is trading at a level of $99,500.
On the Paul Barron Network, Analyst The Trading Parrot said Ethereum’s price rise comes after a strong rebound from support levels around $2.3k to $2.4k in September. This recent breakout feels different from previous attempts at $4K, as it is the third time Ethereum has tested this level, and there is hope that it will stay above $4K this time.
Bullish momentum and future targets
The excitement surrounding Ethereum’s breakout is fueled by strong momentum, with the price moving higher after the October breakout. The analyst has set a target range of $6.8K to $8.5K based on the Fibonacci retracement levels, especially after the market’s recovery from the 2022 bear market.
Market factors driving the wave
Several factors are contributing to Ethereum’s rise, including Layer 1 revenue growth, competition from Layer 2 solutions, and the upcoming Dencun upgrade, which is expected to lower costs for Ethereum users in March 2024. Despite lower fees, Ethereum’s base tier still has around $10.9 million in December, indicating strong underlying demand.
Ethereum ETF inflows and market timing
Ethereum’s performance is also supported by growing interest from institutional investors. The launch of Ethereum ETFs was a game-changer: $800 million flowed into Ethereum in the last five days alone, totaling $2.6 billion since the ETF launched in July. This surge in institutional inflows could contribute to the current bullish trend.