Is Ethereum (ETH) on the verge of breaking above $2,000?
The price of Ethereum (ETH) crossed the $1,870 resistance in the early hours of Thursday. On-chain data analysis points to critical factors that could move ETH's price rally to the $2,000 range in the coming days.
Ethereum bulls extended their rally to a new 60-day high of $1,875 on Thursday. Could the increasing rate of burning make the rally even bigger?
Ethereum is attracting higher volume than usual.
Ethereum price made another move to regain $2,000 on Thursday morning. Although ETH gains are currently trailing behind Bitcoin (BTC), recent on-chain data shows that Ethereum is now attracting an unusually high number of transactions.
Total fees generated from daily transactions on the Ethereum network have been on a steady rise since August, according to data obtained by IntoTheBlock. As shown below, total payouts increased to 3,350 ETH for a 60-day period on November 1st.
The measure of total payments includes the total amount of the participants of the gas network who pay for processing transactions in one day. Intuitively, the continuously increasing fees are positively related to the number of economic transactions made on the blockchain network.
Typically, extended network usage is seen as a great sign, confirming that the continued ETH price increase is driven by organic growth rather than speculation on market sentiment.
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The increasing combustion rate can strengthen the mass momentum.
In the year In April 2023, the Ethereum network underwent the Chapela upgrade, completing the transition from Proof of Work to Proof of Consensus. With the PoS agreement, a significant percentage of the ETH gas collected from users is burned daily.
When coins are burned, they are permanently removed from circulation. This natural devaluation mechanism puts significant pressure on ETH prices.
As expected, as ETH payments and transactions have increased over the past two months, the burn rate has also increased.
The chart above shows that between October 28th and November 1st alone, 7,960 ETH in value was destroyed to the tune of $15 million. Notably, the 2,610 ETH (~$5 million) burned on Wednesday was the highest since August.
The devaluation effect of increasing burn rates will increase market scarcity in the long run. If the burn rate continues to heat up, Ethereum's price may gain some ground against Bitcoin as the year-end approaches.
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ETH Price Prediction: Road to $2,000?
Looking at the chain, Ethereum price looks set to regain the $2,000 territory in the coming days.
Global in/out data, a representation of Ethereum holders' historical buying trends on the chain, supports this narrative. This shows that the $1,880 territory is the high resistance blocking the $2,000 territory.
As shown below, 9.12 million addresses bought 39.13 million ETH at a minimum of $1,880. If you enable instant sales, this may create another re-process.
But the critical separation above that zone could reach $2,000 as predicted by the ETH price rally.
However, if the price of Ethereum falls below the $1,600 mark, the bears could destroy that forecast. But as noted above, the bulls may mount a strong support buying wall around $1,650.
The chart above shows that 7.6 million addresses currently have 13.27 million ETH purchased at a minimum price of $1,640. If you can HODL, you can avoid the major Ethereum price correction.
But if that support level is entered, an extended drop in Litecoin price to $55 could result.
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Disclaimer
In accordance with Trust Project guidelines, this price analysis article is for informational purposes only and should not be construed as financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.
