Ethereum Price Analysis: Here’s the $700M Signal Driving ETH to $4k

Ethereum price topped out at $3,517 on Wednesday, July 17, 2024, marking a 25% rebound over the last 12 days of trading; on-chain data shows increased staking on the ETH 2.0 network could be a key bullish catalyst.

Ethereum Price Spikes 25% Ahead of Expected ETF Launch on July 23

The anticipation surrounding the potential launch of an Ethereum ETF on July 23 has been a significant driver behind Ethereum’s recent price surge.

Further buoyed by the dovish macroeconomic indices in the recent Non-Farm Payrolls and Consumer Price Index (CPI) data, market sentiment surrounding ETH has turned overwhelmingly positive as investors look forward to increased institutional participation and Fed Rate cuts in H2 2024.

Ethereum Price Action | ETHUSD | TradingView

The chart above shows how ETH price fell to a 100-day low of $2,815, during the market crash on July 5. But since the dovish NFP data, bulls traders entered a buying frenzy over the weekend pushing Ethereum price back above the $3,000 level.

However, on Monday, July 15, the Ethereum ETF’s impending launch on July 23 hit the newsreels. The bullish headwinds from the anticipated ETF inflows have put the Ethereum price rally into second gear this week.

At the time of writing on July 17, Ethereum’s price had broken above the $3,517 area, up 25% from the historic lows recorded on July 5. With the Ethereum ETF launch date still nearly a week away, speculators are betting on further upside toward the $4,000 range.

Ethereum ETH 2.0 Stakers have Deposited $700M in 7 Days

Another vital catalyst that has boosted the Ethereum price action in the last few days is the increased staking deposits lumped up by ETH investors. Since the Bloomberg analysts highlighted July 23 as a possible launch date, investors have increased the spate of deposits into the ETH 2.0 beacon chain staking contracts.

The chart below tracks the official data from Ethereum blockchain network, showing the daily changes in the number ETH coins deposited within the ETH 2.0 beacon chain contracts. Increased staking often occurs during periods where investors consider the effective yield more profitable than other alternatives, or when they are increasingly confident of the project’s growth trajectory.

Ethereum 20 Staking Deposits as of July 17 2024 Beaconchain

As of July 10, investors staked a total of 32,919,270 ETH in the Ethereum 2.0 staking contract. But following back-to-back dovish NFP and CPI macroeconomic reports, as well as the announced ETH ETF launch data, Ethereum investors have reacted by increasing their staking deposits.

At the time of writing, the total staked funds have now reached 33,124,709 ETH, reflecting an increase of 205,439 ETH within the last seven days. Increased staking during a market uptrend is interpreted as a bullish signal for a number of reasons.

Firstly it signals that despite Ethereum prices climbing towards monthly-time frame peaks, majority investors are looking to staked more funds, and hold out for future gains rather than sell now. This decline in sell-side pressure could encourage indecisive new entrants to buy-in on the ETH rally in the days ahead.

More so, when the newly-staked 205,439 ETH is valued at the current prices, it means that investors effectively removed over $711 million worth of liquidity from the short-term market supply.

In essence, if investors keep cutting down selling pressure by adding more to the $700 Ethereum 2.0 staking deposits, ETH price is likely to advance further toward $4,000 as demand rises ahead of the ETF launch date slated for July 23.

In summary, the combination of heightened anticipation for an Ethereum ETF and the substantial increase in ETH 2.0 staking deposits are driving Ethereum’s price toward new highs.

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