3 Reasons Why Ethereum Price Could Rally 85% Next?

Ethereum’s native token, Ether (ETH), price is flashing extremely bullish signals, suggesting the potential for a extended rally in the coming months. Notably, the cryptocurrency could surge by as much as 85%, revisiting its previous all-time highs by 2024’s end.

That is due to a confluence of on-chain metrics, technical patterns, and macroeconomic factors.

Ethereum’s MVRV Ratio Indicates Bullish Momentum

Ethereum’s Market Value to Realized Value (MVRV) ratio, a key on-chain metric, is pointing toward growing bullish sentiment. The MVRV ratio compares a cryptocurrency’s current market price to its realized price—the average price at which each token last moved on-chain.

Ethereum’s MVRV ratio is rising faster than Bitcoin’s, suggesting that ETH is increasingly seen as a more attractive investment relative to its historical price levels, according to data shared by Ki Young Ju, the CEO and co-founder of on-chain data analytics platform CryptoQuant.

This uptick in MVRV indicates heightened speculative interest and accumulation, signaling that ETH could be undervalued despite its recent price gains. Historically, when Ethereum’s MVRV outpaces Bitcoin’s, it leads to a period of ETH outperformance, triggering broader altcoin rallies.

Ascending Channel Pattern Suggests a Move Toward $4,750

Ethereum’s monthly chart reveals an ascending channel pattern, a bullish technical indicator guiding its price action since 2020.

The price is currently bouncing after testing the lower trendline of this channel at around $2,110, coinciding with the 50-month exponential moving average (50-month EMA; the red wave in the chart below) which has consistently acted as a strong support level, preventing deeper pullbacks during market corrections.

If ETH maintains this support, the ascending channel suggests a potential upside target near the upper trendline, around $4,750. This target represents an 85% gain from current levels. The channel’s reliability over the past few years adds weight to this scenario, especially as the price remains above key Fibonacci retracement levels, further reinforcing the bullish case.

Federal Reserve Rate Cuts Could Fuel a Broader Rally

Macroeconomic factors could provide the final push for Ethereum’s price surge.

The Federal Reserve is expected to cut interest rates in September and potentially afterward, following signs of slowing inflation and economic uncertainty. Lower interest rates typically reduce the appeal of safe-haven assets like the U.S. dollar while increasing investor appetite for riskier assets, including cryptocurrencies.

Rate cuts have historically led to capital inflows into the crypto market as investors seek higher returns in alternative assets. Ethereum, with its established ecosystem and growing adoption, stands to benefit significantly from such a shift.

Moreover, a dovish Fed could weaken the U.S. dollar, providing additional upward pressure on ETH’s price.