"Ethereum surpasses $3,600: What lies behind the explosive rise and reasons for the new surge"**
Introduction
For the first time in seven months, the price of Ethereum (ETH) has successfully breached the $3,600 level, recording an increase of over 20% in just three days. This rapid rise is not merely a fleeting technical movement but seems to signal the beginning of a new strategic phase for Ethereum in the digital market. What are the real reasons behind this sudden increase? What could the future hold for this leading currency after Bitcoin?
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The main reasons behind the rise of Ethereum
1. Strong flows from institutions and investment funds
In recent days, there has been a significant increase in institutional capital flows into Ethereum through investment platforms and exchange-traded funds (ETFs), especially with the anticipation of regulatory approval for Ethereum ETFs in the United States and European markets. This institutional flow reflects a growing confidence in the future of Ethereum as a strategic investment asset, not just a speculative digital currency.
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2. Increased demand for network solutions and Layer 2 technology
Ethereum is not just a currency; it is the backbone of decentralized applications (dApps), decentralized finance (DeFi), and non-fungible tokens (NFTs). As Layer 2 networks like Arbitrum and Optimism expand, transactions on Ethereum have become faster and cheaper, attracting more users and developers, thus increasing the demand for ETH.
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3. Continuous burning and reduced supply (EIP-1559)
Since the activation of the EIP-1559 update, part of the transaction fees is burned, gradually reducing the supply of Ethereum. As activity on the network continues, burn rates are increasing, creating a deflationary condition that enhances the scarcity of Ethereum in the long term, which supports price increases.
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4. Return of risk appetite and improved market sentiment
With the stabilization of global financial markets and increasing optimism regarding interest rate cuts from central banks, investors' appetite for high-risk assets, particularly cryptocurrencies, has risen. Ethereum, as the second-largest digital currency after Bitcoin, has been the biggest beneficiary of this improvement in overall sentiment.
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5. Anticipate network updates (Ethereum 2.0)
Continuous updates to Ethereum, especially the full transition to a proof-of-stake (PoS) system, have made the network more efficient and less energy-consuming. These changes not only improve performance but also make Ethereum more attractive to investors concerned about environmental sustainability.
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Is this just a technical breakthrough or the beginning of a strategic upward wave?
Analysts indicate that surpassing the $3,600 level after months of resistance is a strong signal that Ethereum is entering a new bullish phase that could push it towards levels of $4,000 – $4,500 in the coming weeks if institutional flows and network momentum continue.
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Conclusion
The rise of Ethereum is not just a technical movement driven by speculation; it is the result of a mix of strong fundamental factors: institutional flows, network improvements, reduced supply, and improved market sentiment. All these indicators suggest that Ethereum is preparing for a pivotal role in the future of the digital economy, and perhaps this rise is just the beginning of a larger wave.
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