Ethereum is flying high and, this time, impelled by its momentum.The price of the token continued with its run from the end of October, seeing more gains to cross the $4,800 mark for the first time in history a few hours ago.Data from coinmarketcap shows the world’s second-largest digital currency peaked at $4,822.36 after opening the day at $4,619.The new all-time high represents a 555.2% year-to-date swell.
The token is currently changing hands within range of its all-time high set earlier today.
What propelled Ether price last week?
Analysts contend that different factors have cumulatively played a role in driving ETH/USD to several peaks in the first week of November.
CME announcement on micro Ethereum futures launch in December
The majority agree that the announcement from the Chicago Mercantile Exchange Group regarding the planned micro futures offering had the most significant impact on ETH prices.Last Wednesday, the group revealed that, pending approval, it was looking to avails micro futures to users in early December.CME previously launched micro Bitcoin futures in May this year.
Ether prices embarked on an uptrend following the announcement, setting a record on the same day, followed by multiple highs on Thursday.Though micro Ethereum futures only account for a meagre proportion (10%) of the entire asset’s size, they still have considerable influence in the market.
In addition to providing investors with a way of generating returns through speculation, micro Ethereum futures will also offer a solution to hedge their risk.
Increase in number of active ETH addresses
Another rationale for the rally is the increased number of active addresses on the network.
Indeed, data from blockchain analytics platform Santiment shows that the number of addresses spiked by about 45% in October and early November.The analytics firm believes that this surge reflects an increase in Ether’s utility.
“#AllTimeHighs just keep on coming for #Ethereum, as the 2nd largest asset in #cryptocurrency has eclipsed $4,643 for the first time in its 6-year history.Utility is a primary indication as to why, as active addresses are up 45% compared to 4 weeks ago,” the on-chain analytics team wrote on Wednesday.
Santiment’s findings align with research from Chinese cryptocurrency reporter Colin Wu who recently shared that Chinese traders were turning to Ether as a hedge instrument against inflation.This could be game-changing as Bitcoin has long been viewed as the reigning asset in this use case.
Goldman Sachs MD says Ether’s can double its value in the next two months
Crypto strategists from the multinational investment financial institution Goldman Sachs strongly believe that Ether is headed for $8,000 before the end of the year.
The bank’s Global Market director Bernhard Rzymelka reported in a detailed note that the token has traded in line with inflation break evens over the last two years, leading to the conclusion that a price target of $8,000 (almost double the current figure) is feasible.
Rzymelka explained that the rising inflation could play in favour of the token rallying.He specifically cited the relationship between crypto and inflation rates, noting that Ether has historically “tracked inflation” and directly correlates with inflation.Rzymelka also revealed that the cryptocurrency sector had matured, and digital assets are poised to become beneficiaries of the growing inflation.
Although the bank executive observed that though a retracement was likely in the short-term, he maintained that the token’s outlook is still positive.He noted that the analysis “lines up rather well with the Ethereum chart, suggesting a late-stage rally with longer-term market top ahead.”
Interestingly, Raoul Pal, a former executive at the giant bank, recently disclosed that he was long on the token.
Earlier this year, Pal predicted that the native token on Ethereum was going to touch $20,000 – basing his projection on Metcalfe’s Law.The law argues that the effect of a network hinges on the square of the number of nodes in the network.
This is not the first time Goldman Sachs has positively viewed the native token on Vitalik Buterin’s project.In July, the bank projected that the Ether would grow to become comparatively better than Bitcoin as a store of value.
Ethereum sees the first week of deflationary issuance
The week leading to November saw a lot of activity on the Ethereum network.Data from WatchTheBurn showed that, for the first time, the network had posted seven consecutive days of negative supply issuance.Simply put, more Ether was being burned (removed from the supply) than was being mined (added to the supply).
More than 811,000 Ether (worth over 3.85 billion at current prices) has been burned and permanently erased – thanks to the London hard fork’s burning mechanism – since August 5, when EIP-1559 was implemented.
The implementation has now made Ether a deflationary coin.
The occurrence has been attributed to the sustained high gas prices on the network, and according to EthHub co-founder Anthony Sassano, the same wasn’t anticipated before the official launch of Eth 2.0.He also added in a Monday note that the London hard fork wasn’t responsible for the sky-high gas prices; rather, it had helped deal with spikes that are frequent during high-demands cycles
“Due to the current PoW issuance (4.5%), a deflationary ETH was not something that was expected to happen until The Merge, but due to the on-going high fees, the Ethereum network is currently burning almost 13,000 ETH per day or $55 million at time of writing – truly insane when you really think about it,” he wrote on The Daily Gwei
Ethereum market performance
Overall, the cryptocurrency market has been bullish for the past week, with some coins seeing all-time highs.Ether has particularly been on an excellent run to print consecutive peaks in the space of six days.
The token broke the $4,500 resistance level last Tuesday before charting a high of $4,664.91 the next day.
A brief correction saw the token drop below $4,300 ahead of the weekend before bouncing back to set a record price above $4,800 today..
