Ethereum on the verge of growth: what is pushing the price up

Mike Smith Feb 6

Ethereum is showing confident growth, breaking the $2,800 mark and adding 4% in a day. This jump is happening against the backdrop of positive news related to the upcoming network update and the active inflow of funds into spot ETFs. While the overall growth of the crypto market was only 0.65%, Ethereum continues to outperform the average and attract the attention of investors.

One of the main factors influencing the price dynamics is the upcoming Pectra update. It is scheduled for March 2025 and is aimed at increasing the scalability of the network, accelerating transaction processing and reducing fees. One of the key changes is an increase in block space, which will improve the efficiency of the entire system. Testing of the innovations will start in February on the Sepolia and Holesky test networks.

According to Ethereum researcher Justin Drake, this update may also affect the reduction of the total ETH supply. He believes that the changes will lead to both a decrease in emissions and an increase in the volume of tokens burned, which in the long term can increase the deflationary effect.

An additional driver of growth was the impressive results of the Ethereum ETF. Over the past five days, there has been a stable capital inflow, which has reached $421.5 million. Since the beginning of the year, the total amount of investments has amounted to $1.1 billion, and the total net inflow has exceeded $3.17 billion. The leader in attracting investments was the ETHA fund from BlackRock, which raised $579 million from January 21 to February 5.

Despite the positive factors, technical indicators point to possible risks of correction. The relative strength index remains below the neutral level, and the moving averages have formed a bearish signal. An important support zone is the $2,700 level, on which the further direction of the price movement may depend.

Consolidation above $3,000 will be a critical step for the continuation of the upward trend. Historically, breaking this threshold has been accompanied by growth of 20-35%, and the next potential target is at $4100. However, traders should take into account possible volatility and not rule out short-term rollbacks before a new surge.