Ethereum price breaks $4500 for the first time since November 2021!
This price breakthrough is significant. $4500 had been a hurdle that had been unsuccessfully crossed multiple times before. This breakthrough is like an athlete setting a personal best, showing strong current momentum and potentially attracting more buyers. If it can hold, the next target would be the historical high of nearly $5000 in 2021. If it falls back, the $4000 to $4200 range should provide support.
There are several key factors driving the price increase:
First, changes in supply and demand. Currently, the supply of Ethereum on exchanges is only 8.9 million coins, a near ten-year low. This is like a certain product being out of stock in a supermarket; when many want to buy, prices naturally rise. More than 32 million Ethereum are staked for interest, and this number is still growing. Additionally, Ethereum's burning mechanism continues to reduce circulation, further increasing its value.
Secondly, the fundamental improvements brought about by technical upgrades. Recent upgrades have significantly enhanced network performance and reduced transaction costs, like widening a two-lane road to eight lanes, making traffic smoother and naturally increasing road value. The number of applications developed based on Ethereum is increasing, and ecological demand continues to expand.
Institutional funds entering the market are also an important driving force. More and more large investment institutions are starting to allocate Ethereum, while the Federal Reserve has signaled interest rate cuts, directing funds from traditional sectors to crypto assets, creating a virtuous cycle.
However, risk factors cannot be ignored:
The risk of leveraged trading. Many people borrow money to trade cryptocurrencies, which is a dangerous behavior. Ordinary people should avoid online lending for trading purposes.
Operational suggestions:
Long-term investors can gradually build positions in the $4200-$4300 range and consider taking partial profits near $4800.
Short-term traders, after the current breakthrough of $4500, should try going long with light positions, aiming for a profit at $4650 and a stop-loss at $4400.
Holders are advised to use hedging tools to manage risks.
In summary, this round of increase is the result of multiple factors resonating. Short-term fluctuations may occur, but long-term development depends on the actual growth of the Ethereum ecosystem. Investors need to remain rational, manage risks well, and avoid blindly chasing the market.
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