Ethereum Price Targets $4K: 3 Factors Driving the Bullish Momentum

Ethereum's price is showing strong momentum, fueled by positive market trends and growing institutional demand. As the price of Ether (ETH) climbs, several key factors suggest that Ethereum may be headed toward the $4,000 mark in the near future.

1. Ether’s Open Interest Hits All-Time Highs

One of the key indicators of Ethereum's bullish outlook is the surge in open interest (OI) in the futures market. Data from CryptoQuant shows that Ethereum's total open interest rose dramatically from 9.8 million ETH on November 5 to an all-time high of 13.2 million ETH by November 11. This increase reflects a return of market interest in Ethereum, with long positions on the rise.

As trader Alan noted, “ETH finally prints us an ATH on futures OI, which shows that interest has finally returned to the boss of altcoins.” Rising open interest indicates growing liquidity and market engagement, both of which are crucial for sustaining Ethereum’s upward price momentum.

2. Increased Demand for ETH

Ethereum’s demand is also on the rise, with on-chain metrics showing an uptick in network activity. The number of daily active addresses (DAA) on Ethereum jumped by 26% from November 5 to November 12, growing from 306,751 to 388,350. This spike in DAA suggests that more users are interacting with the Ethereum network, increasing demand for Ether tokens and supporting the ongoing price rally.

Additionally, data from DappRadar reveals an 8% increase in active addresses across Ethereum’s decentralized applications (DApps) in the past week. With other DeFi metrics, such as total value locked (TVL) and transaction volumes, also showing positive growth, the underlying fundamentals of Ethereum’s ecosystem are strengthening, laying the groundwork for a potential rise toward $4,000.

3. Surge in Spot Ether ETF Inflows

Institutional demand for Ethereum has also seen a significant uptick, particularly through spot Ether exchange-traded funds (ETFs). Following Donald Trump’s victory in the 2024 U.S. presidential election, Ethereum saw its largest ETF inflows since the launch of these products in July 2023. On November 11, spot Ether ETFs recorded over $295 million in inflows, with the Fidelity Ethereum Fund (FETH) leading the way with $115.5 million, followed by BlackRock’s iShares Ethereum Trust (ETHA) with $101 million.

This surge in institutional inflows is a strong indicator of growing confidence in Ethereum. According to CoinShares, Ethereum investment products saw a total of $157 million in inflows for the week ending November 8, pushing year-to-date inflows to $915 million and assets under management to $12 billion. This trend underscores a shift in sentiment toward Ethereum, with increasing institutional participation potentially driving the price toward its March 2023 highs above $4,000.

Conclusion

With increasing open interest in Ethereum futures, rising demand reflected in on-chain activity, and substantial institutional inflows into Ether ETFs, Ethereum is well-positioned for a continued rally. If these trends persist, Ether’s price could soon hit the $4,000 mark, continuing its momentum as a leading digital asset.