Ethereum Price Surpasses $2,500 Milestone
The price of Ethereum reached a significant milestone on February 9 by crossing the $2,500 mark. This achievement has been driven by several factors, including an increase in staking deposits, positive sentiment surrounding the Dencun upgrade, and the potential approval of a spot ETF. These bullish catalysts have propelled the price of ETH higher, with weekly gains reaching 13%. Now the question is whether the bulls can maintain this momentum and push the price to reclaim the $3,000 level in the Ethereum 2.0 Proof of Stake era.
Ethereum Staking Deposits Reach 25% Milestone
The recent launch of the Dencun upgrade on Ethereum’s Sepolia testnet has received positive feedback from market participants. This upgrade promises to enhance transaction processing capacity and reduce costs, attracting more developers and users to the Ethereum DeFi ecosystem. As a result, there has been an increase in staking deposits on the ETH2.0 beacon chain. Investors are depositing more ETH into staking contracts, with an additional 588,866 ETH deposited since the announcement of the Dencun testnet launch on January 31. Currently, there are 29.8 million ETH locked up in staking contracts, accounting for 24.7% of total circulating supply.
Benefits of Increased Staking and Price Prediction
A quarter of ETH coins in circulation are now deposited in ETH2.0 staking contracts on the beacon chain by network validators. This milestone is significant because it improves network security and reduces available coins for trading on spot markets. Additionally, stakers receive an annualized rewards rate of 4%, which incentivizes further deposits. Considering these factors and the overall bullish sentiment in the crypto markets, it is possible that ETH price could reach the $3,000 mark in the coming weeks.
Potential Roadblock at $2,600
Although rising staking deposits have created market scarcity and driven ETH prices upward, there is a potential roadblock at the $2,600 level. A cluster of holders acquired ETH at the maximum price of $2,555, and they may choose to sell and book profits, creating initial resistance. However, if the bulls can overcome this resistance level, a surge towards $3,000 becomes more likely. On the other hand, if the price dips below $2,000, there are investors who acquired ETH at a minimum price of $2,259 and may make covering purchases to prevent losses, potentially triggering a rebound.
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