Ethereum Poised for $5K Breakthrough as Usage and Institutional Support Soar

Ethereum on Track for $5K Milestone Amid Rising Institutional Demand and Network Activity

Ethereum’s native token, Ether (ETH), is positioned for a breakthrough to the $5,000 level as strong on-chain activity and institutional investments fuel optimism, according to a report from CryptoQuant.

Realized Price Hints at New Highs

ETH’s realized price—representing the average price paid by current holders—currently signals an upper resistance of $5.2K, a key marker that capped its 2021 bull run. With fresh demand pouring in, analysts expect this threshold to rise, paving the way for ETH to hit new highs.

Unprecedented Institutional Interest

Spot Ether ETFs have demonstrated exceptional momentum, marking a 13-day streak of inflows totaling nearly $2 billion. After taking five months to secure their first billion in investments, the next billion arrived in just five days, reflecting growing institutional confidence in Ethereum’s long-term potential.

Network Usage Soars

Ethereum’s daily transaction volume has consistently ranged between 6.5 and 7.5 million over the past few months, significantly outpacing its 2023 average of 5 million. This surge underscores growing adoption across decentralized applications (dApps), DeFi platforms, and blockchain ecosystems.

Burn Rate Creates Supply Pressure

ETH’s burn mechanism, which permanently removes tokens via transaction fees, continues to generate deflationary pressure. As network activity increases, the burn rate often surpasses new issuance, effectively shrinking the circulating supply and boosting price potential.

DeFi Ecosystem Expands

Ethereum’s total value locked (TVL) across decentralized finance platforms recently climbed to $77 billion, its highest level since early 2022. Leading platforms like Lido ($38 billion in staked ETH), Aave ($19 billion in assets), and EigenLayer ($18 billion) continue to dominate the ecosystem.

Market Sentiment Shifts

The recent political shift in the U.S., marked by Donald Trump’s reelection, has reignited bullish sentiment in the crypto sector. Expectations of reduced regulatory scrutiny have led to renewed interest in Ethereum, particularly among DeFi enthusiasts and institutional investors.

Poised for a New Era

“ETH is setting up for a major rally, with all signs pointing to a $5,000 price target,” CryptoQuant stated. The convergence of institutional inflows, heightened network utility, and deflationary pressures creates a strong foundation for Ethereum to surpass its previous all-time high and establish itself as a dominant force in the crypto market.