What to Expect from Ethereum (ETH) in December 2024

Ethereum has jumped 33% in the last month, setting it up for possible further gains in December. Analysts are cautiously optimistic, pinpointing key factors that could shape Ethereum’s performance. Here’s what experts suggest might happen-and the conditions that need to occur for those predictions to prove true.

Key Predictions and Influencing Factors

1. Breaking $4,000 is Crucial

• Juan Pellicer from IntoTheBlock believes Ethereum could reach a new all-time high if it breaks $4,000.
• This milestone depends heavily on two factors:
  • Large holders (whales) resuming their accumulation.
  • Retail participation increasing in the market.

However, current data shows large holders’ netflows have declined. This suggests whales are slowing down their purchases, which could hinder ETH’s momentum. If this trend reverses, optimism might return.

2. Monitoring Funding Rates

• Brian Quinlivan, Lead Analyst at Santiment, highlights the importance of funding rates.
• On platforms like Binance and BitMex, these rates indicate whether buyers (longs) or sellers (shorts) dominate the market.
• Presently, funding rates are highly positive, showing buyer dominance. This could mean traders expect ETH to rise further in December.

Quinlivan notes, however, that extremely positive funding rates can lead to excessive optimism. For ETH to maintain steady growth, funding rates should stay neutral, giving room for natural price movement.

3. Market Value to Realized Value (MVRV)

• Julio Moreno from CryptoQuant uses the MVRV ratio to assess Ethereum’s valuation relative to its historical performance.
• According to him, ETH is nearing an undervalued state compared to Bitcoin.
• Historical trends suggest Ethereum might mirror its February 2020 price movement, which was the start of its 2021 bull run.

This metric suggests ETH has potential for growth, but timing and market sentiment will play significant roles.

Technical Analysis: The Bull Flag Pattern

Ethereum’s price chart reveals a bull flag formation. This pattern consists of two parts:

1. A sharp rise (the flagpole).
2. A period of consolidation within a tight range (the flag).

Such patterns often signal an upcoming breakout. Ethereum recently broke out of its consolidation phase, but resistance at $3,600 has slowed its climb.

Potential Scenarios for December

Ethereum’s performance in December depends on key metrics like whale activity, funding rates, and historical valuation. While breaking $4,000 is possible, it requires favorable market conditions. Traders should watch for shifts in these metrics to gauge Ethereum’s next move.