Ethereum, the second-largest cryptocurrency by market capitalization, saw its price increase by 0.67% over the last 24 hours to $1,680.32 according to the data. With a market cap of $202.24 billion and 24 hour trading volume of $2.25 billion, Ethereum remains one of the most widely held and traded cryptocurrencies.
In the past hour, Ethereum's price has slightly decreased by 0.11%, indicating some short-term profit taking after the daily gain. However over the past 7 days, Ethereum has seen strong gains of 5.73% as momentum continues to build. When looking at the past month, Ethereum's price is down 1.18% but has stabilized and started trending upwards again after declining over 6% in the past 6 months.
Overall, Ethereum looks to be building positive upside momentum in the near-term, having recovered from its lows earlier this year. However, some key resistance levels between $1,800 - $2,000 still remain that Ethereum will need to break through to sustain this bullish trend.
What's Behind Ethereum's Recent Positive Momentum?
Ethereum has seen renewed interest and upside price action thanks to several key factors. First, anticipation continues to build around Ethereum's major technical upgrade known as "The Merge" which will transition Ethereum from proof-of-work to proof-of-stake consensus. This upgrade will drastically improve Ethereum's scalability, security, and energy efficiency.
Secondly, overall sentiment and interest in the crypto markets have improved over the past months as inflation fears have subsided. Cryptocurrencies are being perceived as a good hedge against fiat currency debasement. Regulatory clarity around cryptocurrencies has also improved, helping bring institutional investors off the sidelines.
Finally, NFT and metaverse projects continue to drive new adoption and demand for Ethereum and utilization of its blockchain. Ethereum remains the primary blockchain for these next-generation technologies which have captured the public's imagination and brought new users into the crypto ecosystem.
What's the Price Outlook for Ethereum Over the Next Year?
Based on the current positive momentum and bullish fundamentals for Ethereum, my prediction is that Ethereum will likely double from current prices and approach its previous all-time high of $4,000 at some point in mid to late 2024.
Here are some key factors that support this prediction:
- Increased adoption driven by wider NFT, metaverse and DeFi usage which requires Ethereum's blockchain.
- Upcoming Ethereum network upgrades that will reduce fees and congestion, improving usability.
- Major crypto companies launching Ethereum-based financial products like ETFs and derivatives, boosting institutional investment.
- Renewed retail interest and inflow to take advantage of staking rewards post-Merge upgrade.
- Overall greater crypto market maturity and stability helping investors take a long-term view.
Of course, execution risks around the Merge upgrade and potential regulation changes create uncertainty. But fundamentally, Ethereum looks well positioned for strong upside in the coming year thanks to its blockchain's essential and growing utility.
Will Paying Gas Fees on Ethereum Always Be Expensive?
Gas fees on Ethereum refer to the small payments made to compensate for the computing energy required to process and validate transactions on the Ethereum blockchain. These fees tend to spike during times of high network usage and congestion.
While gas fees will likely remain high until scaling solutions are fully implemented, there are a few key improvements coming that should reduce Ethereum gas fees:
First, the shift to proof-of-stake consensus with the Merge will eliminate the energy-intensive mining required today, reducing base fees. Secondly, layer 2 scaling solutions like Optimistic and ZK Rollups will move a lot of activity off the main chain, opening up bandwidth.
Finally, Ethereum 2.0 upgrades like sharding will drastically improve throughput, allowing more transactions per second at lower costs. While short-term volatility remains, gas fees are expected to become manageable for regular users as these scaling solutions roll out over the next 1-2 years.
How Does Staking Work and Should You Stake Your Ethereum?
Ethereum staking allows token holders to earn yield on their Ether by helping validate transactions on the network. By staking Ethereum, you commit to temporarily locking up your Ether to serve as a validator.
In return, stakers earn new Ethereum at an estimated 5-7% annual yield along with transaction fees. The more Ether staked, the more validators there are to process transactions and secure the network.
Staking Ethereum is generally low risk and a great way to earn passive income on your investment. The Merge upgrade will also allow current ETH to be staked instead of having to lock up ETH2.
However, your Ether does get temporarily locked up so you lose some liquidity. There is also the need to run validator software reliably to avoid penalties. Overall though, staking Ethereum is an attractive option that helps secure the network while generating rewards.
In summary, Ethereum looks poised for further upside thanks to its market leadership position, ongoing improvements to network scalability and functionality, and growing mainstream adoption. While risks remain around crypto regulation and competitive blockchains, Ethereum's platform provides essential utility that is only increasing over time. Staking Ethereum provides an attractive way to earn yield while helping secure this next-generation blockchain network.