What should be the price of Ethereum (ETH) to reach 4K?

Ether (ETH) last traded above $4,000 on March 14, two months before the approval of the Ether spot exchange-traded fund (ETF) by the United States Securities and Exchange Commission on May 23. If not, what could lead to a sustained rally above $4,000?

Launching the Spot Spot Ether ETF was less than ideal.

Part of the lack of investor enthusiasm can be attributed to the underperformance of the cryptocurrency market. The current total capitalization of the sector is 2.42 trillion dollars, which is That's down 16.5% from the $2.82 trillion forecast in 2024 as of March 14. Contributing factors include the US Federal Reserve's successful inflation-busting strategy, which has reduced the appeal of alternative assets. .

However, Ether seems to be facing its own issues. Its price has fallen by 10 percent in two months against Bitcoin (BTC). A total of $406 million in U.S. outflows since they first launched on July 23 is partly to blame for aggregate Ether spot ETFs, although the flow has been concentrated in grayscale products.

Unchanged from two months ago, the Ethereum network's total value standing (TVL) was locked at 17.8 million ETH, suggesting that the ecosystem's growth may have stalled. Some analysts argue that Ethereum's gas price, which has been above $1.8 for the past two months, encourages layer-2 scaling solutions. But according to L2Beat data, the TVL for these solutions has remained relatively flat at 12.9 million ETH in the past two months.

Essentially, in order for Ether to regain the $4,000 support level, demand from institutional investors needs to increase. This could be reflected in the net spot ETF trend in the US, or at least a halt in outflows from grayscale ETHE funds. When institutional money enters the scene, traders expect confirmation by measuring the ecosystem's TVL.

Still, some investors remain skeptical of the growth of decentralized applications (DApps). This skepticism is due to the participation of venture capital funds or those who see large projects coming in before airdrops but are unable to sustain the initial hype. Therefore, TVL growth should be matched with improvements in other onchain metrics, such as active addresses.

Ethereum TVL needs to grow, but the roadmap needs to be fixed as well.

Although supporters of Ethereum claim that the decentralized nature of the project is far superior to competitors such as Solana (SOL), BNB Chain (BNB) and Tron (TRX), this argument will be short-lived when prominent investment companies choose to launch their projects elsewhere. In the latest example, on July 23, US-listed asset manager Hamilton Lane selected Solana Libre to launch a token project.

More importantly, Ethereum's dominance among retail traders has recently been challenged as Solana leads decentralized exchange (DEX) trading. Fueled by Memecoins, Solana, launched on Pump.fun, reached a 29.6% DEX market share in July, surpassing Ethereum's 28.1%, according to Defilama data.

Related: Coinbase L2 Base Hosts 80% of Active Uniswap Traders — Token Terminal

Ultimately, Ether's sustainable price growth depends on a clear timeline for Ethereum's proposed scalability improvements, including parallel processing and minable value (MEV) reduction strategies. Proposed changes such as Dansharding aim to increase the current blob limit to 64, greatly increasing data availability.

The next update, called the Pectra fork, will introduce virtual trees, reduce storage requirements, and increase data accessibility. Additionally, investors are eagerly anticipating the implementation of zero-knowledge SNARKs, which increase privacy and encapsulate transaction data into concise evidence, reducing blockchain storage requirements.

Ether's path to $4,000 by 2024 remains viable, but only if these issues related to institutional adoption, increased scalability, and growth of the DApps ecosystem are addressed.

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.