Only by understanding the factors behind Ethereum'

After painting its performance chart red all week to match the downward trend in Bitcoin prices, Ethereum is back. After falling below $3,350, Ethereum price bounced back from the $3,050 area, posting a 12% gain. In this case, Ethereum (ETH) investors are making exciting progress. What’s Letting Bulls Cause Ethereum Price to Rally? Let's investigate further to find out more.

Ethereum Price Market Performance

As of today, ETH price is $3,518.73, up 12.04% in the past 24 hours. Trading volume in the past 24 hours fell 6% to $32.8 billion. Still, the second-largest digital currency on CoinMarketCap showed an 11.54% growth, reaching $420.98 billion. This suggests that while overall trading volumes may be lower, strong buying demand is pushing prices higher. The current circulating supply of ETH tokens is worth $120 million.

Reasons why Ethereum price is rising

The spike in ETH price could be caused by a number of reasons, as discussed below.​

1. BlackRock launches tokenized asset fund “BUIDL”

Leading investment management firm BlackRock has launched “BUIDL,” a tokenized asset fund based on the Ethereum network, marking their first foray into public blockchain token issuance. The fund, previously registered in the British Virgin Islands, aims to provide investors with the benefits of blockchain-based title issuance and trading, instant settlement and transfer capabilities. The minimum initial investment is $5 million, a significant increase from the $100,000 previously disclosed to outside investors. BlackRock partners with BNY Mellon for asset custody and management and Securitize Markets, LLC to provide additional expertise.​

Asset tokenization converts traditional financial assets into digital tokens that are stored and traded on the blockchain, with benefits such as enhanced accessibility, real-time transparent settlement, interoperability, and greater security. Partnering with trusted custodians and transfer agents demonstrates the importance of connecting traditional financial markets with blockchain-based assets through tokenization.

The launch of BlackRock’s “BUIDL” tokenized asset fund on Ethereum has had multiple impacts on Ethereum’s price: increased adoption, technology validation, institutional interest, infrastructure development, and a positive long-term outlook. These factors have led to a surge in demand and price appreciation for Ethereum.

2. “Come on” initiative

Ethereum developers have launched a new initiative called "pump thegas" to increase the gas limit on the blockchain network from 30 million to 40 million in an effort to expand Ethereum and reduce transaction fees. The initiative is led by core developer Eric Connor and former MakerDAO smart contract lead Mariano Conti, and has gained support on social media through the hashtag #pumpthegas.​

Proposals to increase the gas limit have been gaining steam, with Ethereum co-founder Vitalik Buterin suggesting raising the gas limit to 40 million. Supporters of the initiative, such as foundation contributor Jesse Pollak, believe that increasing the gas limit will benefit all parties involved.​

The Ethereum gas limit refers to the maximum amount of gas spent by a transaction or smart contract in each block. Contracts have predefined gas limits to prevent the network from overloading. By increasing the gas limit by 33%, Ethereum will handle 33% more transactions in a day, helping to scale both Layer 1 and Layer 2 Ethereum. The plan also highlights the use of data blobs introduced in the Dencun upgrade to reduce Layer 2 transaction fees.

The initiative contributed to the increase in Ethereum price by solving scalability issues, lowering transaction fees, gaining community support, and demonstrating positive technological developments within the ecosystem.

Will the bullish momentum in Ethereum price continue?

An evaluation of Ethereum Technical Analysis (ETHUSD) on the hourly chart reveals a mix of signals from different indicators. Market sentiment appears to be fairly neutral, with the moving averages showing a similar mixed picture.

Ethereum recently broke out of a significant downtrend and is currently encountering the $3,550 mark. A close above this level could lead to a more positive market outlook, pushing the price towards $3,820 and possibly even $4,000. Resistance is at $4021.4, leading to increased selling pressure. If the price continues to rise, the price of ETH may reach $4,400, or even $5,084 if the increase is greater.​

Conversely, if Ethereum price declines, it will find support at $3337.4, which may lead to increased buying activity. Traders may view this as an opportunity to open new long positions or add to existing long positions and expect a rebound from this point.

If the price of Ethereum continues to fall, it could hit $3,032.4, a major support area that traders may consider an attractive entry opportunity, which could lead to a reversal or a brief pause in the downtrend.

If Ethereum experiences a deeper drop, it could drop to $2,348.4.​

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