There are entire armies of analysts who make price predictions based on technical analysis: analyzing price charts. While this type of analysis is valuable, there are other, more fundamental ways to make estimates about (future) price development.
Compare it to two ways of estimating future home prices. You can look at the past price development but you can also dig deeper, for example for data on how many houses will be built, or immigration data for a region.
We take a look at one technical indicator of ETH and four so-called on-chain indicators of Ether.
1. The price of ETH in BTC is breaking out.
It appears that ETH is breaking out of the ascending triangle pattern, as described in this article. Although nothing is completely certain yet, it seems that the ETH price expressed in Bitcoin is going to rise significantly.
2. The number of ETH on crypto exchanges continues to fall.
The reverse would be a touch alarming: when people collectively move their crypto from their cold storage to their exchange, it is often a sign that they want to sell. But when the opposite happens, as it is now, they most likely don't want to sell. This creates upward pressure on the price. The figure also clearly shows the inverse relationship between the amount of ETH on crypto exchanges and the price.
3. An increasing amount of ETH is tied up in smart contracts.
The vast majority of this tied-up ETH (77%) is sitting in decentralized finance applications (defi). For example, the ETH is tied up there as collateral for a loan. This ETH is therefore not immediately available for sale on the market.
4. More and more ETH is going into 2.0 staking contracts.
By staking Eth, depositors receive interest. Currently 8.5 million ETH is tied up in staking contracts, only to be released when ETH 2.0 will launch sometime in 2022. That's more than 7% of the total amount of Ether not being currently available.
5. Eth is being burned.
Already a million ETH have already been "burned" since early August of 2021. See this article. Another factor that is pushing up the scarcity of ETH.
In short, a combination of factors is leading to a situation where less and less ETH is available for sale. Of course, the supply side tells only one half of the story. But on the demand side, there are no signs of cooling. The number of active ETH addresses, for example, continues to grow solidly at about 50% per year. You do the math!
More investors are looking at these data, so it's no surprise that there are a lot of ETH bulls out there. Renowned macro-investor Raoul Pal (Real Vision) is almost all-in in ETH. and Cathie Woord (ARK Invest) has announced that ARK will put about 40% of their crypto-funds in ETH in the future.