Ethereum, the largest altcoin in the world and the second-largest cryptocurrency, is more than just a digital asset. Outside of the cryptocurrency community, it is also known for its potential as an open-source blockchain that makes use of cutting-edge features like smart contract functionality. Ethereum has experienced tremendous growth over the years, surpassing Bitcoin in 2021 with a gain of about 400% as opposed to 66%. As is frequently the case in the cryptocurrency market, Ethereum underperformed for two years in a row despite having a more stable price than other altcoins.
But the popular cryptocurrency is now gaining traction again, as it has surged beyond the $4,000 mark, triggering substantial liquidations in short positions.This is a notable shift in the industry, especially as Bitcoin’s dominance appears to be waning, with investors shifting their attention towards altcoins like Ethereum. The liquidation of short positions showcases a renewed sense of strength in the altcoin market and optimism surrounding eth price prediction and is proof that sentiment can quickly change, particularly when driven by liquidation cascades.
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Technical analysis of Ethereum indicates a bullish pattern
The price of Ethereum has retreated from $4,945 to $4,318, but according to technical indicators, a robust bullish breakout could follow. Notably, the token is aiming to retest the $4,100 support level, which it held during the 2022 crypto market downturn, and if it succeeds to break above it, that could translate into a major rebound, with possible targets at $4,946, $5,000, and even a staggering $6,250.
Ethereum is a cryptocurrency with strong fundamentals, and an increasing market share in major industries like gaming, DeFi, and NFTs, which further supports a potential price rebound. Moreover, the growing inflows in spot Ethereum ETFs, which we will discuss in more detail below, also indicate rising institutional interest in the asset.
Ethereum sees a surge in institutional inflows
For so long, Ethereum has been a reliable tech platform, but it’s now gaining attention as an institutional-grade asset as well. According to recent data, the week ending July 11 saw substantial net inflows into ETH ETFs – more specifically, $908 million, representing the highest weekly inflow since the product’s launch. At the same time, it has been the ninth consecutive week of inflows, demonstrating sustained interest from institutional investors.
Many whales are transferring ETH to cold wallets instead of deploying it in yield strategies, a typical pattern that suggests investors are preparing for long-term holding. Collectively, this trend holds deeper meaning: it indicates that the 2nd most popular cryptocurrency in the world is becoming a foundational financial layer in the digital economy, rather than remaining a speculative trading asset. In fact, the data shows that Ethereum is now seeing one of the most robust capital inflow cycles in its history, and if the current momentum continues – and macro conditions are favorable- the asset could retest its past all-time highs or even achieve new milestones in the following months.
The Pectra upgrade could be a major catalyst for Ethereum’s price
As is well known, the Ethereum development team is constantly working on new features to enhance the network, and the most recent one, Pectra, has marked a significant turning point in the development of Ethereum’s blockchain. Its security, scalability, and overall efficiency were intended to be improved by this update, which has important ramifications for Ethereum owners.
While faster transactions increase network usability, they also give developers more options for creating dApps. At the same time, dApps can function more smoothly and allow for more intricate interactions and real-time processing with improved responsiveness.
The Pectra upgrade, however, is expected to have a significant economic impact on Ethereum owners because it will increase the asset’s utility as a medium for smart contracts and transactions, which will eventually boost demand for ETH and increase its value. The Ethereum ecosystem will expand, as more users and developers join it and new projects are launched, generating more value and opportunities. Although the Pectra update’s impact on Ethereum’s long-term performance is uncertain, it undoubtedly marks a sea change for the blockchain and offers substantial benefits to ETH holders.
Is now a good time to invest in Ethereum?
Overall, Ethereum is perceived as a robust investment within the crypto space due to several reasons. First of all, unlike Bitcoin, it enables smart contracts and dApps, which is a notable and appealing feature. Moreover, Ethereum is transitioning to Proof of Stake through Ethereum 2.0, and these upgrades are particularly appealing to investors concerned about the long-term scalability and environmental impact of crypto assets.
Buying Ethereum right now could be a good move, especially considering the consistent inflows into ETH ETFs, which could support its price over the long run. However, it’s essential to remember that there are never guarantees in the crypto space, and broader macroeconomic factors could bring some uncertainty, as well as regulatory changes from the U.S. government. If you are confident in the potential of the asset in the long term and are willing to take the risks involved, Ethereum could indeed be a robust investment. However, as with any other cryptocurrency, you must approach it with caution and consider diversifying your portfolio to protect your investment and minimize losses.
The bottom line
Ethereum is in a good position to go up given that many positive technical patterns are coming together, and there is strong institutional demand. However, no predictions are 100% accurate, so it’s essential to keep an eye on the news and make an informed investment decision after weighing the risks and considering your own personal circumstances.