Ethereum price fell for the third day in a row, erasing some of the gains gained earlier this month. ETH has fallen from this year’s high of $3,300 to $3,152. In this article, we explore the main reasons why ETH price will ultimately rebound this year.
Buy BitMine Ethereum
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One of the main reasons why Ethereum price could rebound this year is the aggressive buying by Tom Lee’s company Bitmine.
BitMine has been the most active buyer of Ethereum over the past few months. Bought 278,551 coins in the last 30 days for a total purchase value of 4.14 million coins and over $13 billion.
The company wants to accumulate 6 million coins over the long term, so there is room for more Bitcoin purchases. In particular, if the company can increase its share capacity from 500 million shares to 50 billion shares, there is a slight possibility that the target could be raised.
Ethereum launches two major upgrades this year
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Another bullish catalyst for Ethereum price is developers implementing Gramsterdam and Hegota upgrades later this year. These are the most important upgrades after developers implemented the Fusaka upgrade in December.
Gramsterdam aims to improve fairness, predictability, and reliability in block construction. For example, this upgrade strengthens proposal and author separation to reduce the risk of MEV centralization.
This upgrade also introduces deterministic block-level access lists for more predictable execution. A benchmarked gas re-pricing system will also be introduced.
The Hegota upgrade introduces verkle trees to reduce storage requirements on nodes. The goal is to increase fairness and predictability. It is common for cryptocurrencies to increase in price before and after major upgrades.
Increasing market share in key industries
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Another notable factor in Ethereum’s price is that the network’s market share continues to grow in key areas. Chief among these is the tokenization of real world assets (RWA), which has skyrocketed to more than $12 billion.
This growth continued last month when JPMorgan analysts launched the first tokenized fund on the network. Other companies are also currently using Ethereum, including major companies such as Janus Henderson and WisdomTree.
The decentralized finance (DeFi) industry is likely to continue rising in the short term. Total value locked (TVL) jumped to over $147 billion and bridged TVL jumped to over $465 billion.
ETH ETF inflow
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Ethereum price could also benefit from future ETF inflows. According to the data, the Spot Ethereum ETF added more than $358 million in inflows, reversing losses from the past two months.
This increase in ETF inflows is likely to continue to increase as Morgan Stanley has filed for a spot ETH ETF. This is notable since the company is one of Wall Street’s largest firms, with over $1.8 trillion in assets under management.
Macro factors are at play this year, with the US Federal Reserve expected to continue lowering interest rates. The Senate is also likely to pass the CLARITY Act.
Ethereum price technical analysis
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ETH Price Chart | Source: TradingView
The 12-hour chart shows that ETH price has performed well over the past few months, going from a December low of $2,768 to the current $3,155.
It has formed a double bottom pattern, a popular bullish reversal chart pattern with a neckline of $3,478. The coin has broken above the 23.6% Fibonacci retracement level.
Ethereum also formed an ascending triangle pattern. Therefore, the token is likely to continue rising as the bulls target the key resistance level at $4,000. This pullback will be confirmed above the key resistance level at $3,478.
