Ethereum is back: after months of stagnation, the ETH price has broken through the psychologically important barrier and is flirting with further highs.

The second largest cryptocurrency in terms of market capitalization, Ethereum, has broken through the psychologically important $3,000 price barrier, at least on some crypto exchanges.

ETH last traded at this level on April 21, 2022, before the dominant smart contracts platform entered a long bear market.

The price performance is based on the upcoming Dencun upgrade.

Dencun is intended to significantly increase the efficiency of Ethereum's layer 2 networks, which will allow it to once again compete with powerful blockchains such as Solana or Sui. The update is expected on March 13.

The latest request for a spot ETH ETF from asset manager Franklin Templeton also seems to put investors in a positive mood. Once approved by the U.S. Securities and Exchange Commission, the ETF is expected to generate revenue through Ethereum's staking mechanism.

Ahead of the approval, investors are apparently expecting a similar brilliant rally as before the approval of numerous Bitcoin spot ETFs in January of this year. The world's largest asset manager, BlackRock, already filed an Ethereum ETF application with the SEC in November.

Moreover, the data on Ethereum's supply dynamics are positive. More and more coins are being staked or locked into smart contracts. Exchange holdings are falling rapidly.

A burn mechanism also constantly reduces the amount in circulation. Thus, if demand remains constant, a supply shock is imminent, just as with Bitcoin.

If Ethereum can continue to break through the $3,000 mark, the all-time high of around $4,900 is getting closer.