Here Are The Major Developments That Could Drive Ethereum Price Back Above $4,000

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Ethereum, the second largest cryptocurrency by market cap, is Trading at $2420 After a recent price surge, Ethereum has gained 3.4% and 6.3% over the past 24 hours and seven days respectively, raising hopes of an extended bull run. As price action continues to unfold, some key developments are taking hold, which could pave the way for Ethereum to rally back above $4,000.

Stablecoin transaction volume hits new record high

Despite the bearish sentiment that persisted over the 30-day timeframe, on-chain data shows that the Ethereum blockchain continues to see massive activity, especially in the stablecoin space. On-chain stablecoin trading volume surged in August, breaking all-time highs. Specifically, stablecoin trading volume reached $1.46 trillion.

This surge in stablecoin activity reinforces Ethereum’s position as the preferred blockchain platform in the world of decentralized finance. As stablecoin adoption continues to rise, this could lead to Ethereum revenue growth Due to the increasing demand for ETH tokens used to pay transaction fees. This increasing interest in turn could contribute to its price reaching $4,000 or more.

Beware of 0.015 point financing rates

Another major factor to watch now regarding Ethereum is the financing rateThe funding rate is a measure that tracks the cost of holding a long or short position in the perpetual futures market. Funding rates reflect market sentiment, with positive funding rates indicating that long traders are pushing short positions, indicating a bullish outlook, while negative rates show a bearish trend.

According to on-chain data from CryptoQuant, Ethereum’s funding rate is approaching 0.015 points. As an analyst at CryptoQuant, He pointed outEthereum’s funding rate is currently between 0.002 and 0.005. This movement is reminiscent of the pattern in September 2023, when the funding rate was similarly low.

While these numbers may seem modest for a typical bull market, one analyst at CryptoQuant noted that this could be the lull before a major upside move. This is because funding rates eventually crossed 0.015 in 2023, allowing Ethereum to “surge from $1,500 to $4,000.” Such an event could see Ethereum surge to $4,000 in the coming months.

Ethereum: Network Growth

According to Santiment, the Ethereum network has seen massive growth in the past week, recently hitting a four-month high. Aside from L2 solutions like Optimism and Arbitrum, the platform remains the foundation for decentralized finance (DeFi) and non-fungible tokens (NFTs). This network growth has been accompanied by an increase in wallet address creation and active addresses.

At the time of writing, Ethereum is trading at $2,421. If the above factors are in line with Ethereum, we may see ETH keep getting closer $4000 mark.

Featured image by StormGain, chart by TradingView

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