3 reasons why the price of Ethereum is headed to $4K

Growing euphoria in the crypto-friendly business environment in the United States following Donald Trump's US presidential election has sent the price of Ether (ETH) jumping more than 37% in the past seven days to the highest trading volume not seen since July 24.

At the time of writing, Ether is trading at $3,392. Demand for the spot Ethereum ETF is increasing, and onchain metrics suggest that the altcoins' progress will remain intact.

Ether's open demand reaches an all-time high

Ether's rally over the past seven days has been preceded by increasing open long ETH positions in the futures market. According to data from onchain market data firm CryptoQuant, Ethereum's total open demand in the foreign market rose from 9.8 million ETH on November 5 to 13.2 million ETH on November 11.

“ETH finally prints ATH on Futures OI, which shows that demand is finally returning to the leader of altcoins,” said trader Alan in a post on X, saying that the market can never ignore ETH.

Fellow trader Olek explained that the rise in Ether's OIA indicates “increased liquidity and market participation”.

Olek added:

“Ethereum, in particular, is flashing signs of a reversal, with a move higher indicating that the market is primed for a move.”

Demand for ETH will increase

Data from CryptoQuant shows that increased demand for ETH appears to be picking up again amid increasing onchain activity, as seen in daily active addresses (DAA) on the Ethereum blockchain. The chart below shows that Ethereum DAA increased from 306,751 on November 5th to 388,350 on November 12th. This represents an increase of 26%, after Donald Trump won the 2024 US presidential election last week.

Therefore, OnChain's data shows that users are increasingly interacting with the Layer-1 blockchain, which suggests an increase in Ether token transactions.

According to Dapradar data, Ethereum Dapps active addresses have increased by 8% in the last seven days. Overall, the data is encouraging, considering other DeFi metrics such as total value locked, number of transactions and NFT volume have also risen over the past week.

Ethereum network growth is needed to continue, creating the demand needed to push ETH to $4,000.

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US spot Ether ETFs recorded $295 million in revenue

Following Trump's victory, Ether's recovery point saw ETH ETF flows turn positive after a net inflow of $73 million over the past two days leading up to the November 5th election.

These investment products recorded their biggest inflow on Nov. 11, with inflows of more than $295 million since July 23, according to SoSoValue data.

The Fidelity Ethereum Fund (FETH) led the pack with record revenue of $115.5 million, while the BlackRock-endorsed iShares Ethereum Trust ETF (ETHA) was second with $101 million.

The Greyscale Ethereum Mini Trust ETF (ETH) came in third with $63.3 million in revenue, followed by the Bitwise Ethereum ETF (ETHW) with $15.6 million in revenue. All other US spot ether ETFs recorded zero returns.

Additional data from CoinShares shows that Ethereum investment products saw a total of $157 million in revenue in the week ending November 8, bringing year-to-date revenue to $915 million and assets under management to $12 billion.

This is the highest inflow since its launch in July, indicating significant improvement in sentiment, CoinShares said in an accompanying note.

A significant trend that began a week ago is continuing, suggesting that increased institutional demand for Ether investment products could push the price above $4,000 on March 12.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.