Key Points
- Despite a recent pullback, Ethereum’s user activity and demand remained high among U.S. investors.
- The Dencun upgrade, which aims to scale Ethereum’s network, went live in March 2024.
Even with a recent pullback, Ethereum’s user activity and demand remained robust, especially among U.S. investors.
In March 2024, Ethereum (ETH) briefly traded above the $4K mark for about 48 hours, indicating strong interest in the cryptocurrency.
Low Supply on Exchanges and the Dencun Upgrade
The supply of ETH on exchanges was reported to be low, reducing the likelihood of a significant sell-off.
Moreover, the demand for ETH reached a year-to-date high, coinciding with the live launch of the Dencun upgrade in mid-March.
This upgrade, described by Jesse Pollack, creator of Base and Head of Protocols at Coinbase, as the initial step in a long-term strategy, aims to scale the Ethereum network to handle hundreds of thousands of transactions per second.
U.S. Investor Demand and Coinbase Premium
The Coinbase Premium, which measures the percentage difference between Ethereum prices on Coinbase Pro and Binance, reached its highest level since May 2023, indicating a surge in demand from U.S. investors.
However, this trend was affected by the recent pullback in the cryptocurrency market.
The index, which had been trending higher since February, peaked at 0.23 on March 8th but fell to -0.1 by March 17th, reflecting a shift in investor sentiment.
This shift suggests that while U.S. investors were initially enthusiastic about Ethereum, they quickly changed their stance as prices dropped below the $4K level.
Despite the pullback, Ethereum’s active addresses count trended upward in the first half of March, surpassing January’s highs, indicating an uptick in user demand.
Simultaneously, the Open Interest and Funding Rate indicated a short-term bearish sentiment in the market.
In addition, Ethereum wallets holding more than 10k tokens recorded profits earlier in the month, suggesting that whale behavior could provide valuable insights for traders and analysts.
Despite some bearish indicators, certain on-chain metrics suggest a bullish outlook for Ethereum, with the price trend likely to remain positive unless it falls below the $3.1k level.
