Ethereum (ETH) has been one of the biggest gainers in the last couple of weeks, with ETH price back on everybody’s minds and on everybody’s lips. Eleanor Brooks from BlockchainShock is the publisher of this guest post, which goes deep on the different things driving this remarkable rally. She looks at some possible long-term price targets and gives tips for surviving crypto’s perpetual volatility.

Factors Fueling Ethereum's Ascent

Let's unpack a few major reasons behind Ethereum's recent bullish push. Requesting institutions are demonstrating growing interest. Beyond that, there’s the approval of spot Ethereum ETFs that has created a frenzy, the continuing adoption of DeFi applications, and overall favorable macroeconomic conditions.

This recent spike in institutional interest has been especially remarkable. Additionally, large “whale” wallets have been spotted piling up ETH just below key price levels, which indicates a high level of confidence that the cryptocurrency will rebound. This increase of institutional money creates huge upward pressure on the price. In addition, the recent approval of spot Ethereum ETFs has contributed to the resurgence of interest in Ethereum. Investors are clamoring to get access to ETH through regulated investment vehicles. This demand is sure to raise prices even more.

Another key factor is the increasing popularity of decentralized finance (or DeFi) applications that are largely built on the Ethereum blockchain. Users and developers are rushing to DeFi platforms. Consequently, demand for ETH is skyrocketing as it’s a requirement to pay transaction fees and keep the network secure. This much larger utility makes Ethereum a far more valuable proposition. So you have kind of an ideal environment of easing inflation, weakening dollar. This climate supports a number of risk-on assets, one of them being Ethereum. When inflation is cool and the dollar is weakening, investors usually look for higher-yielding investments, which are cryptocurrencies.

Technical Breakouts and Price Targets

From a technical analysis perspective, Ethereum’s recent breakout through major resistance levels has been a big story. Rising above the $3,000 and $2,819 levels would mean an adjacent bullish trend, possibly paving the way for an uninterrupted upwards rally.

According to the latest figures, spot ETH exchange-traded funds (ETFs) in the U.S. garnered more than $726.74 million on Wednesday alone. This is an extraordinary sum, representing their largest daily net inflow ever recorded. Since the beginning of July, ETH ETFs have accumulated total net inflows of $2.27 billion, the highest monthly amount since the funds were launched last July. Ethereum’s price is riding this wave of institutional investment to break its previous all-time highs.

Moving average analysis shows very strong buy signals ETH-USD. Four moving averages—the 50-day, 10-day exponential, 20-day and 200-day—all indicate it’s a “Buy.” That means positive momentum. Yet, the 5-day moving average is giving a “Sell.” The Relative Strength Index (RSI) is currently 66.53, indicating a Neutral condition. Moving Averages Convergence Divergence (MACD) and Williams % R are other indicators that indicate a “Sell.” When we combine the Fibonacci and Classic Levels together, we see that support is right around 2915.91 – 2935.91. In the opposite direction, resistance lies between 2940.67 and 2990.19. Analysts are predicting Ethereum could hit $5,000 in the next few months. This potential increase largely depends on whether the bullish trend we’ve seen so far this year continues.

Navigating Market Volatility

The crypto market is notoriously unpredictable and Ethereum is no different. To ride out these ebbs and flows, investors may find opportunities to use strong risk management approaches and have portfolio buffers in place.

Risk Management and Portfolio Diversification

To avoid the risk of such technical failings, users should use well-maintained and actively developed clients such as Prysm or Teku. This can go a long way toward reducing the chances of an egregious technical failure.

  • Set Stop-Loss Orders: Protect your investments by setting stop-loss orders at predetermined price levels.
  • Take Profits Strategically: Don't get greedy. Secure profits along the way as Ethereum's price increases.
  • Stay Informed: Keep abreast of market news, technical analysis, and expert opinions.
  • Diversify Your Portfolio: Allocate your investments across various asset classes to mitigate risk.

Risk Mitigation

2023 has seen an increasing interest in tokenization, which could impact Ethereum’s price. In fact, a recent survey found that 57% of institutions are eager to invest in tokenized assets. In particular, they are keen on tokenized private funds, tokenized securities, and tokenized public funds. Moreover, the majority (60%) of respondent institutions would prefer to tokenize on a public-permissioned blockchain. At the same time, 47% of hedge fund and institutional asset managers say they want to tokenize their own assets.

The Rise of Tokenization

Spot Ethereum ETFs may offer investors who cannot buy Ethereum directly, such as retirement account investors, a cheaper and more reliable way to invest in Ethereum. Ethereum ETFs further democratize Ethereum for those investors. They allow consumers to get access to the benefits of the cryptocurrency without having to purchase and hold it outright. It’s the approval and launch of Ethereum ETFs that have propelled these price gains for Ethereum to a large degree. This trend will likely continue to drive its price action going forward.

The recent approval of Ethereum ETFs has unleashed a brutal fee-cutting war among issuers to undercut each other’s fees. This fierce competition would be a huge win for investors. Ethereum ETFs allow investors to trade their expectations about movements in Ethereum prices. If you add them to a regular, diversified investment portfolio, you can lower your total risk and increase your overall returns.

The introduction of Ethereum ETFs has led to a "race to the bottom" in terms of fees among issuers, which may benefit investors. Ethereum ETFs provide a way for investors to gain exposure to Ethereum as part of a diversified investment portfolio, potentially reducing risk and increasing potential returns.