Rotation Back Into Ethereum Begins, Could ETH Hit $10,000 in 2024?

Ethereum’s recent lackluster price movement had many calling it an ‘ETH death’ as rivals Solana and Avalanche skyrocketed.

However, the fourth quarter layer-1 rotation was similar to that in 2021, observed crypto analyst ‘Metaquant’ on Jan. 5.

Moreover, Solana and Avalanche are slowing down after weeks of upward price action, so where is the capital flowing next?

Ethereum Rotation Begins

The analyst noted that ETH is flowing out of centralized exchanges, and activity on the network is slowly increasing compared to the past weeks.

“The rotation from alt L1s to ETH has started – ETH on-chain season is heating up.”

Q4 saw an L1 rotation similar to 2021, but now it’s time for the king to play its hand.$SOL and $AVAX are now slowing down after weeks of up-only PA.

Here is a quick analysis of where the money is flowing next

— Metaquant (@QuantMeta) January 4, 2024

The analyst added that in the past ten days, AVAX and SOL have cooled down after their huge runs, while ETH went sideways without showing signs of weakness. “The next run will likely be on ETH and its ecosystem,” he said.

Additionally, the activity on Ethereum and layer-2 networks has been growing steadily for months. Total value locked across the L2 ecosystem hit an all-time high of $21 billion on Jan. 4, according to L2beat.

In addition to the TVL peak, daily active addresses, layer-2 fees, and layer-2 stablecoin market capitalization have also been steadily increasing.

Since ETH prices have been lagging as attention was elsewhere, “once price goes up, everyone will move again on ETH and L2s,” he said.

“Note how there is no bull run without an ETH on-chain season. So, it’s a matter of time before this starts to happen.”

Additionally, embattled crypto lender Celsius has just announced that it is unstaking ETH to return to creditors.

While this may cause some short-term volatility if they sell, it has been viewed as a positive for Ethereum markets without the vampirical cloud of Celsius and its huge ETH bags hanging over them.

ETH Price Outlook

ETH prices have remained flat on the day at $2,242 at the time of writing. However, the asset is down 8% from its weekly high of $2,434 on Dec. 2 as markets cool.

Zooming out, Ethereum has been consolidating at current levels for the past month.

Additionally, analysts have been mulling potential price peaks for ETH this year. Some see it hitting $10,000 quite easily. This is only double its all-time high in the last cycle, in which it made a $4,800 gain from trough to peak.