Is $4.5K the Next Stop for Ethereum? – Why is ETH price up today?
Ether (ETH) rose 11.6% from December 10 to December 12, recovering losses from the previous two days. This price action was driven in part by inflows into Ether spot exchange-traded funds (ETFs) and higher activity on the Ethereum network, which helped restore investor confidence.
Between December 9 and December 11, the spot Ether ETF recorded net inflows of $557 million, which significantly contributed to the rapid price recovery. However, this seems to be more of an effect than a root cause. Investors took the opportunity to buy the dip at $3,550, speculating on Ethereum's continued dominance and rapid adoption of decentralized applications (DApps).
The Ethereum network's total value locked (TVL) rose to $78 billion on December 12, a 31% increase from $59.3 billion 30 days earlier, according to Defillama. This growth is mainly due to the increase in deposits through protocols such as AAVE, EigenLayer, Athena, Binance Staking, Spark and Pendle. In comparison, BNB Chain deposits grew 10 percent over the same period, while Tron saw an 18 percent increase.
In absolute terms, Ethereum remains the clear leader. Its closest competitor, Solana, has $9.4 billion in deposits. In addition, Ethereum's layer-2 processing solutions account for another $11 billion in deposits, providing a more direct comparison to Solana due to extremely low transaction fees. Meanwhile, transactions on the Ethereum base layer charge an average of $7.50.
The 7-day volume of the Ethereum network increased by 21% on December 12, reaching $24.3 billion. Although Solana leads absolute onchain activity with $30.7 billion in sales revenue, the combined volumes of Ethereum's layer-2 blockchains exceed this figure. Together, Base, Arbitram, Polygon and Optimism recorded $25.6 billion in volume over the 7-day period.
In general, the Ethereum ecosystem has a market share of 47% in DApp volumes, which is not correct to confirm that Solana is the absolute leader. While Solana's footprint in memecoins is notable and provides a level of competition, Ethereum dominates in liquidity, lending, commodity farming, and synthetic assets.
Bitwise sets ETH price target at $7,000, citing ETF adoption and Layer-2 growth
Bitwise, a leading cryptocurrency ETF provider, presented a report to institutional clients on December 10 that included a $7,000 ETH target price due to growing ETF adoption. The report cited expectations for accelerated growth in Ethereum layer-2 blockchains, coupled with “significant growth in stablecoins and tokenized projects.”
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On December 11, World Liberty Financial, the decentralized finance (DeFi) startup associated with US President Donald Trump, exchanged the USDC stablecoin for Ether, bringing its total Ether holdings to over $55 million. Analysts say that this transaction has affected market sentiment, which has contributed to the rise in ETH prices.
Ether's price is up 65% over the past three months, and the recent low below $3,550 on Dec. 10 has shown strong buying support. These factors indicate favorable opportunities for further price gains in the short term.
While it is impossible to predict whether the current bullish momentum will push the price of ETH above $4,500, there is a constructive situation supported by onchain activity and growing institutional interest, which makes Ethereum a leader in DApp activity.
This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.