Ethereum is the longstanding second-largest cryptocurrency by market capitalization. Its market cap is in the $180 billion as we head into the second half of October 2023. (Meanwhile, Bitcoin’s market cap is around $530 billion).

Ether price has been stuck in the doldrums since March. Sliding to the $1,550 handle last week, ETH is now on par with its March exchange rate to the US dollar.

Ether Up +30% Over Jan, But Down -25% Since Apr

After a steep but short-lived rally in the first half of April, achieving a YTD high price of $2,120, Ether is now trading at a 7-month low price with two weeks left until November.

As a result of Ethereum launching out of 2022 with a hot bull run to thaw out the crypto winter frost this January, ETH is up 30% YTD. It started the year off trading at $1,200.

But on the 6-month chart, Ether’s price is down 25%, with a 4.72% decline in the last 30 days. Investors are keen to know the next moves on major crypto exchanges.

Here are 6 key factors to consider for the near, medium, and long term:

1. Low Fees Driving Ether Inflation (Mixed)

The rapid development of the Ethereum platform has made it theoretically better than ever. The Merge and a number of Layer-2 scalability chains have made the platform faster and cheaper than ever.

But lower fees are a mixed bag.

Lower gas fees could attract more users and developers to Ethereum. But they are driving Ether inflation by burning fewer tokens than new ETH issuance by stakers.

In the trailing 30 days, Ether supply has grown by 33,500 ETH (worth $52 million). That is an inflationary headwind for Ether’s price and a far cry from the initially deflationary effects of the merge.

2. Ether Price Looks Good on 1YR, 5YR Charts (Bullish)

There’s little doubt that Ethereum is here to stay as the world’s leading decentralized computer. Its merge was almost too successful too soon in up-scaling the blockchain’s throughput capacity.

While before there was not enough pipe for all the oil, there’s now less oil than a pipe. But the network is ready to take on massive growth when the timing is right.

Meanwhile, on the 1-year chart, Ether price is down to a seven-month low. There’s no telling for sure when it’ll reach the bottom, but in its entire history, we’re near the average length of peak-to-bottom.

Ether looks even cheaper on the 5-year chart, with Ether down 76% from its all-time high of $4,600 in Nov 2021. Furthermore, ETH on crypto exchanges is at its lowest level since 2018, according to Santiment data.

That’s bullish for Ether because such moves “reduce selling pressure and show investors’ long-term convictions.” Bag holders are apparently confident in the value of Ethereum’s long-range macro-thesis.

3. ETH Staking Demand Has Crashed Since June (Bearish)

In June, the validator queue to stake Ether had 96,600 in line to stake as validator nodes for blockchain rewards. By October, that number had fallen to a mere 223. That’s according to Validator Queue with data from Beacon Chain Ethereum Explorer.

The average wait time to stake ETH has fallen from 45 days to an hour and fifty minutes. This isn’t all bad for the price. One of the reasons for falling staking demand is the rise of liquid staking options like Lido.

However, Lido and other liquid staking services create additional risks for Ethereum.

A misconfiguration earlier this month caused 20 Lido validators to get slashed from the network. The failure incurred $30,000 worth of ETH penalties for Lido to withdraw its staked Ether.

Furthermore, staking services are creating a larger target area for SEC action under an aggressive SEC regime. So, the staking outlook for Ethereum is currently leaning bearish.

4. Ether Price and Institutional Demand (Bullish)

Staking demand on Ethereum probably won’t stay low forever, though.

While they are slow to move on cryptocurrencies, institutional investors are growing increasingly interested in on-chain BTC and spot ETF Bitcoin. They’re also interested in staking Ether.

Institutional Tradfi investors like that Ether is more energy efficient and eco-friendly than Bitcoin with staked validators instead of proof-of-work post-merge. That’ll be great for Ethereum when Wall Street finally makes big moves in crypto:

“Earlier this year, BlackRock’s legendary chief executive Larry Fink, who shocked the world when he announced a surprise crypto flip, said he expects bitcoin and crypto to ‘transcend’ traditional currencies, including the U.S. dollar, thanks to Wall Street adoption.”

One Tradfi institution, British bank Standard Chartered, is so bullish over these prospects that it recently projected Ether to grow in market value to $8,000 per 1 ETH by the end of 2026.

5. Regulatory Threats (Bearish)

However, don’t expect a bevy of institutions to jump into staking Ether by the end of next week. It will still be some time before traditional financial institutions and hedge funds feel ready to make a move.

A big part of that is regulatory ambiguity driven by an overreaching SEC and a scrum of policymakers taking their time to understand and legislate policy for blockchain in the United States.

Traditional investing institutions, meanwhile, are loathe to make any big moves without being sure they won’t endanger their relationship with the immensely powerful Securities and Exchange Commission.

6. Ether price supply and demand economics (Bullish)

Along with its older cousin, Bitcoin, Ethereum, and other major cryptos have an astonishing multi-year track record of high-ROI bull runs based on monetary policy and supply and demand.

While the Federal Reserve is committed to taming inflation, it may not be able to avoid a policy of monetary expansion to keep the economy from getting sluggish.

The US central bank certainly seems poised to enter an interest rate pause in 2024, if not a more dovish regime. That has always buoyed Bitcoin and Ether with macro tailwinds.

Furthermore, Bitcoin’s halving cycle is about to reach another quadrennial cut in new supply this April. That has, in every cycle so far, been a major factor in precipitating bull runs on Bitcoin and Ethereum, as profits spill over into the rest of the ecosystem seeking more ROI, and altcoins ride BTC’s coattails.

The previously mentioned 5-year low ETH levels on crypto exchanges are worth mentioning again in any current discussion about the supply and demand economics underlying Ether price.