Ethereum Surges Above $4,000 as Network Activity Reaches New Highs
Ethereum’s ether (ETH) has broken through the $4,000 barrier, reaching a nine-month high on Friday. Trading at $4,033, the cryptocurrency has seen a 2.4% increase over the last 24 hours and an 8.4% rise over the past week, surpassing bitcoin (BTC) in both performance metrics.
The price surge coincides with record inflows into spot ether exchange-traded funds (ETFs) on Thursday, signaling heightened interest from institutional investors. With this rally, ether is edging closer to a new 2024 high, trailing its all-time peak of $4,868 by just 20%.
Ether’s recovery against bitcoin is also notable, with the ETH/BTC ratio climbing back to 0.04. This marks a significant rebound from its decline since September 2022, highlighting renewed confidence in Ethereum’s growth potential.
Market dynamics are also shifting, as indicated by the growing Coinbase premium on ether. This premium\u2014where ether trades at a higher price on Coinbase compared to Binance\u2014is seen as a sign of strong U.S.-based demand, particularly among institutional investors. The widening gap aligns with the opening of U.S. markets, underscoring the influence of American traders on the current rally.
On-chain data adds another layer of optimism. Glassnode reports that active Ethereum addresses have surged dramatically, with the 7-day moving average rising from 368,000 in September to 523,000 in December. This uptick in network activity supports ether’s price through Ethereum’s built-in “burn” mechanism, which reduces token supply as transactions increase.
The broader cryptocurrency market, however, presents a mixed picture. The CoinDesk 20 index, which tracks top cryptocurrencies by market capitalization, has dropped 1.4% over the last day. Stellar (XLM) and litecoin (LTC) have led the declines, falling 3.1% and 5%, respectively. On the other hand, tokens like Uniswap (UNI) and render token (RDNR) have shown resilience, gaining 11.7% and 6.4% during the same period.
Ethereum’s latest milestone demonstrates its growing influence in the digital asset market. Driven by institutional demand, robust on-chain activity, and a supportive market environment, ether is well-positioned to maintain its upward trajectory as 2024 progresses.
