According to Cointelegraph, Ethereum is showing signs of a bullish trend, with its price potentially heading towards $4,000. This optimism is fueled by the formation of a 'bull flag' on the daily chart, a technical pattern often associated with strong upward momentum. The increase in Ethereum's network activity and total value locked (TVL) further supports this positive outlook.
Ethereum's transaction fees have been on the rise, indicating increased network activity. The price of Ether (ETH) surged by nearly 56% to reach an eight-week high of $2,734 on May 23, up from a low of $1,750 on May 6. This price increase coincides with a 37% rise in Ethereum's daily transaction count over the past 30 days, levels last observed in January 2024. The daily average transaction fees also hit a 90-day high of 0.0005 ETH ($1.33) on May 22. High transaction counts and fees suggest heightened user interaction with the network, whether for decentralized finance (DeFi), non-fungible tokens (NFTs), or other decentralized applications (DApps). Historically, Ether's price has surged during periods of high network usage, as seen during the 2021 DeFi boom.
The increase in Ethereum's network activity is also reflected in the total value locked (TVL) on its smart contracts. Ethereum's TVL rose to $65.3 billion on May 23 from $45.26 billion on April 22, marking an increase of over 44% in nearly 30 days. This growth is supported by a 51% increase in deposits on Pendle, a tokenization protocol, and a 48% growth on Ether.fi and EingenLayer. Ethereum maintains its position as the leader by TVL, with a market dominance of 54%, compared to Solana's 8% and BNB Chain's 5% among layer-1 chains. Additionally, US-listed spot Ether ETFs saw a total of $249 million in net inflows between May 13 and May 22, adding to the demand-side momentum.
The bull flag pattern on Ethereum's daily chart suggests a potential rise to just below $4,000, representing a 56% increase from the current price. Crypto analyst Michael van de Poppe noted that ETH needs to hold the $2,400 support level to increase the chances of moving toward $3,500 and beyond. As reported by Cointelegraph, Ether's uptrend is likely to continue toward $3,600 in May if key support levels are maintained. This article does not provide investment advice or recommendations. Readers should conduct their own research before making investment decisions.
