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Can Ethereum Reach $4k – Will It Surpass BTC Price?

Ethereum price surged past $3,000 on February 20, surpassing Bitcoin’s 22% growth; ETH 2.0 staking deposit trends observed this week suggest the gap could widen even further. The media frenzy surrounding the Bitcoin ETF approval saw BTC price outperform ETH in the early days of the 2024 market rally. However, this market trend has flipped since the start of February. As investors make long-term bets, the bulls may capitalize on the rising ETH 2.0 staking deposits and declining market supply to drive a rally above $4,000.

Ethereum has managed to surpass Bitcoin despite the record-breaking ETF inflows that Bitcoin has attracted. The U.S. Securities Exchange Commission (SEC) approved the Bitcoin ETFs on January 11, leading to unprecedented interest from institutional investors. As of February 19, the 10 newly-launched ETFs had acquired over 654,000 BTC, worth more than $36 billion. Despite these significant inflows into Bitcoin, ETH’s price performance has outpaced BTC.

Ethereum (ETH) vs. Bitcoin (BTC) Price Performance | Feb.1 to Feb. 20, 2023
Ethereum (ETH) vs. Bitcoin (BTC) Price Performance | Feb.1 to Feb. 20, 2023 | Source: TradingView

The historical price chart shows that BTC prices increased by 24.2% in February, rising from $41,864 to a monthly peak of $52,985. Meanwhile, ETH price has shown a more impressive performance, with a 33.7% increase from $2,241 to the $3,000 milestone on February 20, marking the first time since April 26, 2022.

Investors place long-term bets on Ethereum

Following the successful Dencun upgrade, Ethereum has garnered significant attention from investors. Data on the blockchain indicates that investors staking coins for long-term gains from an impending ETH ETF approval have played a crucial role in ETH’s price surge, which exceeded that of BTC in February. In the past week, investors have deposited coins worth over $1.5 billion, with 504,799 ETH staked into ETH 2.0 contracts on February 13 and February 20. This has pushed the total staking deposits on the Proof of Stake (PoS) network to 30,064,242 ETH, according to official data from the Beacon chain.

Investors Deposit 504,799 ETH into Ethereum 2.0 Beacon.chain | Feb 13 - Feb. 20
Investors Deposit 504,799 ETH into Ethereum 2.0 Beacon.chain | Feb. 13 – Feb. 20 | Source:

During a bullish market, a significant increase in staking deposits reflects a positive trend for any PoS network. This rise enhances network security and stability amid increased network activity, indicating that major ETH investors are committed to the long-term even at elevated prices. The $1.5 billion increase in ETH staking, coupled with prices at a 2-year high, demonstrates a surge in investor confidence and network security commitment.

If this trend continues, the reduction in market supply with rising demand could see ETH’s price extend its lead over BTC in the coming weeks. This is particularly noteworthy as the Bitcoin network lacks a comparable large-scale staking yield incentive.

Forecast: Can Ethereum’s price reach $3,500?

Data analysis suggests that ETH’s price is poised for further growth towards $3,500 in the near future. However, historical accumulation trends indicate strong resistance at the $3,200 level. IntoTheBlock’s global in/out of the money (GIOM) data categorizes all existing ETH investors by their entry prices, showing that 12.9 million holders acquired 4.74 million ETH at a minimum price of $3,212. A decisive breakout above $3,200 could pave the way for a larger upswing towards the $3,500 mark as projected.

Ethereum (ETH) Price Forecast, February 2024
Ethereum (ETH) Price Forecast, February 2024 | Source: IntoTheBlock

In case of a price drop below $2,500, the 5.2 million addresses that acquired 4.1 million ETH at the minimum price of $2,548 could form a significant buy-wall, potentially invalidating the optimistic prediction. Nonetheless, the overall outlook remains positive for Ethereum’s price trajectory.

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