• This could pave the way for Ethereum to reach $4300

  • Ethereum, the top altcoin, was trading at $3800 after an exponential rally that saw it test the $4,000 psychological level on September 3. It has managed to hold its ground, remaining well above $3750. If it can recover above $3,860, a retest of the all-time high is on the cards for ETH.

    So, how far will the Ethereum rally take us? The answer can be found in the metrics listed below.

    The highest network valuation in more than a year

    Ethereum’s NVT signal (14-day moving average) recently reached a 17-month high not seen since August 2020. A high NVT value indicates that the network’s valuation exceeds its transaction volume. When NVT is high, the network value is significantly greater than the value being transferred on the network; while this may represent a potential bubble, in the case of Ethereum, it represented legitimate growth stages in addition to strong price action.

    Notably, whenever the NVTS experienced parabolic growth over the last two years, Ethereum experienced a sustained rally with massive price gains. A similar pattern was observed near the beginning of January 2020, when Ethereum increased by nearly 140 percent in just one month.

    Interestingly, a 140 percent increase from a low on July 20 will take the alt near $4300, which is close to the ATH of $4,337.10. Thus, a strong NVTS trajectory with gains of around 140 percent could propel ETH to its ATH and possibly beyond if the NVTS rally continues.

    However, a drop in Ethereum’s active addresses, which has brought it to an all-time low of eight months, is a concerning trend, but an increase in active addresses can push the rally even further. A surge in active addresses prior to ETH’s ATH would be critical.

    The future of ETH futures looks promising.

    Aside from the high network value, the open interest and daily volume of ETH futures are two other factors influencing the price of ETH. According to Skew data, the volume of ETH options has been increasing over the last week. Indeed, on September 1, Ethereum experienced the highest peak in options volumes, followed by a smaller peak two days later.

    Furthermore, on Okex, Ethereum’s Open Interest in Perpetual Futures contracts hit a 13-month high of $589,275,968.65. ETH futures aggregated open interest was high on other exchanges as well, approaching the May ATH of 10.9 billion. At the time of publication, the total Futures Aggregated Open Interest stood at 10.6 billion. Those looking to profit from Ethereum may find the derivatives market to be an appealing opportunity.

    The path of ETH to ATH

    The rise of Defi, NFT marketplace tokens, and other altcoins will be dependent on the top altcoin reaching its ATH. Furthermore, with several projects closely following ETH in terms of price action and correlation, ETH could increase the overall market capitalization of Defi. For the time being, ETH was about 30% off its all-time high. However, a push from spot traders and an increase in active addresses may ensure its upward trajectory.

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