Speculation is once again brewing regarding whether the prominent altcoin Ethereum might finally reach the long-desired $5,000 milestone.
This renewed enthusiasm arises as on-chain data confirms that the crypto market has officially entered altcoin season, a period where altcoins have traditionally outperformed Bitcoin (BTC). Although the broader market has faced bearish pressure in recent days, negatively impacting ETH’s current price behavior, underlying data indicates resilience among coin holders.
This situation could pave the way for a potential rally towards $5,000 in the near future. Here’s how.
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80% of Top Altcoins Outperform Bitcoin—Is ETH Next to Rally?
As per Blockchain Center, an altcoin season commences when at least 75% of the top 50 altcoins outperform BTC over a three-month span.
Recent data from the on-chain analytics platform reveals that 80% of these tokens have outpaced BTC’s performance in the last 90 days—significantly exceeding the required threshold. This officially denotes that the market has entered altcoin season.
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With market focus shifting away from Bitcoin and towards altcoins, ETH could stand to gain from this. This raises the question of whether this shift could spark a rally towards the highly anticipated $5,000 milestone for the altcoin.
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ETH Holder Conviction and Institutional Demand Fuel $5,000 Buzz
A prominent indicator that this is feasible comes from the rising institutional flows in ETH. According to data from SosoValue, Ethereum ETFs experienced a net inflow of $639 million last week, marking a significant reversal from the prior week when they recorded their largest-ever weekly net outflow of $798 million.
This turnaround signifies renewed confidence among institutional investors, indicating that the demand for ETH exposure is on the rise.
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Bullish momentum has continued into the current week, with inflows already reaching $360 million. This corroborates key investors’ interest in the altcoin, a trend that could potentially elevate its price to new heights as the altcoin season unfolds.
Moreover, holders exhibit persistent conviction despite ETH’s rather tepid performance over the last few trading sessions. This is evidenced by the coin’s Holder Retention Rate, which continues to rise. At the time of writing, this metric is at 96.13%.
The Holder Retention Rate gauges the percentage of addresses that retain a balance of ETH over consecutive 30-day spans. When this metric increases, investors are opting to hold onto their positions instead of exiting the market, even amidst short-term volatility.
This trend indicates rising confidence in ETH’s long-term potential and could facilitate a quicker rally towards $5,000 as the market adapts to the new altcoin season.
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$4,957 Breakout Could Ignite Rally to $5,000
A sustained increase in institutional inflows and stronger holding behavior among investors could aid ETH in reversing its current downward trajectory.
This momentum might drive the price towards the $4,957 resistance threshold. A successful breach above this level could set the stage for a rally to the $5,000 mark.
On the contrary, if market sentiment deteriorates further, ETH risks extending its decline, potentially falling to $4,211.
