After painting the performance chart red all week to match Bitcoin price downward trend, Ethereum has returned. After dropping below $3,350, the Ethereum price has experienced a bounce back from the $3,050 area, with a rise of 12%. Exciting advancements are happening for Ethereum (ETH) investors in this scenario. What enabled the bulls to cause a price rebound in Ethereum. Let’s investigate further to discover more.
Ethereum Price Market Performance
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As of today, the price of ETH stands at $3,518.73, showing a 12.04% rise over the past 24 hours. The trading volume in the last 24 hours dropped by 6% to reach a total of $32.8 billion. In spite of this, the second largest digital currency on CoinMarketCap shows a growth of 11.54% to $420.98 billion. This indicates that there is a powerful demand for buying pushing the price up, despite potentially lower trading volume in general. The ETH token currently has a circulating supply worth $120 million.
Reasons Behind Ethereum Price Rising
The soaring of ETH price may have been caused by various reasons as discussed below.
1. BlackRock Launch of Tokenized Asset Fund ‘BUIDL’
BlackRock, a leading investment management firm, unveiled its tokenized asset fund ‘BUIDL’ built on the Ethereum network, their first venture into public blockchain token issuance. The fund, previously registered in the British Virgin Islands, aims to provide investors with advantages like blockchain-based ownership issuance and trading, instant settlement, and transfer capabilities. The initial investment minimum is $5 million, a significant increase from the previously disclosed $100,000 for external investors. BlackRock partnered with BNY Mellon for asset custody and administration and Securitize Markets, LLC for added expertise.
Tokenizing assets converts traditional financial assets into digital tokens stored and traded on a blockchain, offering benefits like enhanced accessibility, real-time transparent settlement, interoperability, and improved security. The collaboration with trusted custodians and transfer agents signifies the importance of bridging traditional financial markets with blockchain-based assets through tokenization.
BlackRock’s launch of the ‘BUIDL’ tokenized asset fund on Ethereum had several impacts on Ether’s price: increased adoption, validation of technology, institutional interest, infrastructure development, and a positive long-term outlook. These factors contributed to a surge in demand and price appreciation for Ethereum.
Congratulations @BlackRock and @Securitize on the launch of the BlackRock USD Institutional Digital Liquidity Fund!
This is another great milestone for the tokenization of assets!https://t.co/JVeliGUO7r
— Robert Leshner (@rleshner) March 19, 2024
2. “Pump the gas” initiative
Ethereum developers have launched a new initiative called “pump the gas” to raise the gas limit on the blockchain network from 30 million to 40 million in order to scale Ethereum and reduce transaction fees. The initiative, led by core developer Eric Connor and former MakerDAO smart contracts head Mariano Conti, has gained support on social media with the #pumpthegas hashtag.
The proposal to increase the gas limit has been gaining momentum, with Ethereum co-founder Vitalik Buterin suggesting the increase to 40 million. Supporters of the initiative, such as base contributor Jesse Pollak, believe that increasing the gas limit will benefit all parties involved.
Today, @nanexcool and I are launching an effort to help raise the Ethereum gas limit from 30mn to 40mn
This can result in a 15-33% reduction in L1 tx fees
We are calling on solo stakers, client teams, pools and community members to help#pumpthegas https://t.co/TYoyI35cle
— eric.eth (@econoar) March 19, 2024
The Ethereum gas limit refers to the maximum amount of gas spent on transactions or smart contracts in each block, with contracts having a predefined gas limit to prevent network overloads. By raising the gas limit by 33%, Ethereum would be able to process 33% more transactions in a day, helping to scale both Layer 1 and Layer 2 Ethereum. The initiative also highlighted the use of data blobs introduced in the Dencun upgrade to reduce layer-2 transaction fees.
This initiative has contributed to the increase in Ethereum price by addressing scalability concerns, reducing transaction fees, garnering community support, and showcasing positive technological developments within the ecosystem.
Will the Bullish Momentum Continue for Ethereum Price?
An assessment of Ethereum’s technical analysis (ETHUSD) on the hourly chart reveals a blend of signals from different indicators. Market sentiment seems to be fairly neutral, with moving averages showing a comparable blend.
The SMA 100 is currently showing positive momentum in the short-to-medium term as it is in a ‘buy’ position. Its rising path indicates market sentiment
Ethereum recently broke through a significant downward trend and is currently encountering a barrier at $3,550. If it manages to close above this level, it could lead to a more positive market outlook, driving the price upwards to $3,820 and potentially $4,000. Resistance would be noted at $4021.4, leading to a rise in selling pressure. If prices continue to rise, the price of ETH could reach $4400 and even $5084 it it experiences a larger increase.
Conversely, if the value of Ethereum decreases, it will find support at $3337.4, potentially leading to a rise in buying activity. Traders might view this as a chance to open new long positions or increase current ones with the anticipation of a rebound from this point.
Should Ethereum’s price keep dropping, it may hit $3032.4, a major support zone where traders might consider it as an appealing opportunity to enter the market, which could result in a possible turnaround or a brief pause in the declining trend.
If Ethereum experiences a larger decrease, it could potentially drop to $2348.4.
