The price of eth to usd on Ethereum is driven by multiple factors. As of 10:00 GMT on November 5, 2023, its price was $1,850 (CoinMarketCap #CMC257), down 62% from the peak of $4,878 in November 2021. But it has risen by 82% compared to the low point of $1,015 in January 2023. Regulatory dynamics directly affect short-term fluctuations. In October 2023, the US SEC postponed the approval of VanEck Ethereum ETF (Case number SEC-2023-02891), resulting in a 7.3% decline in eth to usd within 3 hours. The EU’s MiCA Act, which defines ETH as a “utility token”, has driven its 24-hour rebound by 9.1%. On-chain data shows that whale addresses holding over 10,000 ETH (accounting for 34% of total circulation) have increased their holdings by 150,000 ETH (approximately 278 million US dollars) at the support level of 1,800 US dollars, but the Coinbase order book indicates that there is a sell wall worth 520 million US dollars (Santiment #SANAPI) at 1,900 US dollars.
The technological upgrade and the supply and demand relationship are intertwined. After the Shanghai upgrade in April 2023, the amount of ETH staked increased from 15 million to 27 million (with a growth rate of 80%), but the validator withdrawal speed reached 1.5 per second, resulting in a 0.8% monthly increase in the circulating supply (Glassnode #GN2023). Layer2 scalability solutions (such as Arbitrum’s daily trading volume exceeding 3 million transactions) have driven Gas fees down to 15 Gwei (approximately $1.5 per transaction), but the locked value (TVL) of DeFi has shrunk from a peak of $105 billion in 2022 to $43 billion (DefiLlama data). It has weakened the demand support for ETH as a Gas token.
The macroeconomic linkage was significant. On the eve of the Federal Reserve’s interest rate decision in November, the US Dollar Index (DXY) rose to 107.1 (the peak of the year), the total market capitalization of cryptocurrencies evaporated by 2.3%, and the 30-day correlation coefficient between eth to usd and the S&P 500 rose to 0.68 (the historical median of 0.45). The derivatives market reacted fiercely. The funding rate of Binance’s ETH/USDT perpetual contract soared to 0.035% (dominated by long positions), and the open interest exceeded 5.5 billion US dollars (Coinglass #CGDATA). However, the risk of leveraged liquidation is concentrated in the range of $1,750- $1,950 (with an estimated margin call of $380 million).
Institutional behavior differentiation: The discount rate of Grayscale ETHE Trust has narrowed from -60% to -20%. If BlackRock ETH Spot ETF is approved (application number S7-32-23), it may attract an additional $5.3 billion in funds (Bloomberg’s prediction model). However, the SEC’s lawsuit against Coinbase (accusing it of conducting ETH transactions as securities activities) led to a 25% weekly drop in the platform’s ETH/USD trading volume. On-chain activity indicators show that the revenue of the ETH network (in US dollars) decreased by 31% year-on-year, but the NFT trading volume increased by 19% weekly (CryptoSlam data), reflecting the contradiction of ecological transformation.
In extreme cases, the collapse of Terra in 2022 triggered market panic, with eth to usd plunging by 34% in a single week to $1,070. However, the selling pressure unlocked by staking after the upgrade in Shanghai in 2023 was partially offset by institutional purchases (such as Jump Trading buying 120,000 ETH in a single day). The price volatility (30-day annualized) has decreased from 95% to 65%. Compliance risks and technological breakthroughs coexist. Visa’s test of Ethereum’s automatic payment flow (with an average daily settlement of 1.5 million US dollars) provides fundamental support, but the risk of SEC litigation (with an appeal probability of 55%) still puts pressure on the price.