Ethereum Price Prediction: ETH eyes $3,000 as network activity explodes and scarcity grows

  • Ethereum price has just hit a new all-time high at $1,475 and aims higher.
  • Most on-chain metrics have turned bullish for ETH despite rising prices.

Ethereum has finally hit a clear new all-time high across all exchanges, and it’s currently under a healthy consolidation period. Over the past week, Ethereum’s dominance over the market increased from 13% to 17%, while Bitcoin lost close to five percentage points. 

Ethereum price gears up for $3,000 as most indicators turn bullish

The Eth2 deposit contract continues to receive more Ethereum. At the time of writing, it holds around 2.83 million ETH worth over $4 billion at current prices. This is a significant number of Ethereum coins that are locked and cannot be sold. 

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ETH coins locked

In addition to the 2.83 million ETH locked inside Eth2, there are also 7 million ETH locked across DeFi protocols and projects, which means close to 10 million ETH are currently not truly in circulation, increasing its scarcity significantly, and therefore, bullish pressure.

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ETH Transactions chart

One of the main strengths of Ethereum during this run has been a massive increase in the number of transactions in the past several months. The digital asset has reached a 7-day average of 1.15 million transactions, which is almost higher than its peak of transactions in January 2018. 

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Ethereum exchange Netflow

On January 22, 2021, Ethereum saw a colossal spike in the number of coins withdrawn from exchanges. Around 659,000 ETH left exchanges in just a single hour, which is the largest amount ever and indicates traders and investors are not interested in selling the digital asset currently. 

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Ethereum supply on exchanges chart

Although this kind of spikes is not common, the total number of ETH inside exchanges has been declining since March 2020, from a high of 27% of Ethereum to only 20.8% currently, a notable decay. This is a key aspect that should allow Ethereum price to continue rising as demand quickly outpaces supply scarcity. 

eth price

Total Value Locked chart

The DeFi industry has seen a tremendous surge of money in the past few weeks, from $15.4 billion on December 31, 2020, to a current all-time high of $26.5 billion. Considering that around 90% of all DeFi projects are built on Ethereum, this metric shows how fast the ecosystem is growing, and it’s undoubtedly bullish for ETH. 

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ETH/USD 4-hour chart

However, despite all the positive indicators and on-chain metrics in favor of Ethereum, the TD Sequential indicator has presented a sell signal on the 4-hour chart, which, in the past, has proven to be a reliable call. This could mean that Ethereum price is poised for a short-term pullback before resuming its uptrend. 

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