The price of Ether is back to $4K for the first time since March
Ether (ETH) price has broken above the $4,000 price level following months of underperformance – regaining levels not seen since March 2024.
According to data from CoinMarketCap, the price of Ethereum increased by 2.8% during the day and gained 10.7% in the last week.
Ether's positive performance follows trading volume below its monthly 200-day exponential moving average, which is a volatile support level. Currently, the Relative Strength Index (RSI) is approximately 71 and is entering overbought territory.
From August to early November, Ether showed sideways price action until the current rally ignited on November 6 in response to Donald Trump's election victory.
Analysts believe that the price of Ether could reach $7,000 in the current market cycle, boosted by cryptocurrency exchanges and the ecosystem of developers building on the Ethereum blockchain.
Ethereum price action. Source: TradingView
Related: Ethereum Beacon Chain ‘Far From Perfect' But Brings Great Opportunity
Ethereum's layer-1 revenues are undermined by L2 competition.
The release of Denkun's update in March 2024 dramatically reduced fees for Ethereum layer-2 peering networks, causing Ethereum layer-1 revenues to drop by 99%.
Reduced fees translate into reduced demand for native assets on modern contract platforms. However, the network charges started to increase again in September.
According to data from Token Terminal, Ethereum's base layer generated an estimated $10.9 million in payments in December. For comparison, Ethereum made payments in the $500,000 range in August at the height of the payment ban.
Ethereum Layer-1 Network Fees June-December 2024. Source: Token Terminal
Falling Layer-1 revenues have prompted some investors and analysts to say that the Ethereum network is dying due to cannibalization from competing Layer-2 networks.
Long-time Ethereum Foundation researcher Justin Drake has proposed saving Ethereum's roadmap by introducing a native tracker on the Layer-1 network managed by Ethereum's validators. Subsequent layer-2 scaling solutions allow ordering transactions.
Drake explained that the introduction of the Layer-1 sequel to Ethereum will enhance the integration between decentralized applications and the ecosystem's scrolls.
Magazine: Back 2025: Is Ethereum Ready to Meet Bitcoin and Solana?
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.
