3 Factors That Could Propel Ethereum Price to Surge by 85% Next

Ethereum’s native digital currency, Ether (ETH), is demonstrating highly optimistic signals, hinting at a potential prolonged uptrend in the upcoming months. There is a strong possibility that the cryptocurrency could surge by up to 85%, revisiting its previous peak levels by the end of 2024.

This positive outlook is driven by a combination of on-chain metrics, technical patterns, and broader macroeconomic conditions.

Ethereum’s Market Value to Realized Value (MVRV) ratio, a critical on-chain indicator, is indicating a growing bullish sentiment. The MVRV ratio compares a cryptocurrency’s current market price to its realized price, which is the average price at which each token last changed hands on-chain.

Data shared by Ki Young Ju, the CEO and co-founder of on-chain data analytics platform CryptoQuant, shows that Ethereum’s MVRV ratio is increasing at a faster pace than Bitcoin’s. This suggests that ETH is becoming a more attractive investment compared to its historical price levels.

The rise in MVRV signifies heightened speculative interest and accumulation, implying that Ethereum might be undervalued despite its recent price increases. Historically, when Ethereum’s MVRV surpasses that of Bitcoin, it tends to lead to a period of outperformance by ETH, triggering broader rallies in alternative cryptocurrencies.

Looking at Ethereum’s monthly chart, an ascending channel pattern has been guiding its price action since 2020. The price is currently rebounding after testing the lower trendline of this channel around $2,110, which aligns with the 50-month exponential moving average (50-month EMA). The 50-month EMA has consistently served as a robust support level, preventing significant pullbacks during market corrections.

If Ethereum maintains this support, the ascending channel pattern suggests a potential target near the upper trendline at around $4,750. This target represents an 85% increase from current levels. The pattern’s reliability over the past few years adds credibility to this scenario, especially as the price remains above key Fibonacci retracement levels, further supporting the bullish outlook.

On the macroeconomic front, potential rate cuts by the Federal Reserve could act as a catalyst for Ethereum’s price surge. The Federal Reserve is anticipated to lower interest rates in September and possibly beyond, following indications of slowing inflation and economic uncertainty. Reduced interest rates typically diminish the appeal of safe-haven assets like the U.S. dollar while boosting investor interest in riskier assets such as cryptocurrencies.

Historically, rate cuts have led to increased capital inflows into the crypto market as investors seek higher returns in alternative assets. Ethereum, with its well-established ecosystem and expanding adoption, is positioned to benefit significantly from such a market shift. Additionally, a dovish stance by the Federal Reserve could exert downward pressure on the U.S. dollar, further propelling ETH’s price upwards.