Ethereum (ETH), the second-largest cryptocurrency in the world, has experienced a significant surge in price over the past month. This recent bullish rally in the crypto market, coupled with BlackRock’s involvement, has propelled ETH to its year-to-date high of $2,139. Market data provider Kaiko’s report highlights how ETH has outperformed BTC and several altcoins in recent weeks, signaling a noteworthy shift in market dynamics.
Over the past year, Ethereum struggled to gain momentum despite successful upgrades such as The Merge in April. However, the sentiment around ETH dramatically changed when BlackRock filed for a spot ETH exchange-traded fund (ETF). This move led to a significant reversal in the ETH to Bitcoin (BTC) ratio and had a substantial impact on the market. ETH prices surged above $2,000 for the first time since April, and daily spot trade volumes reached $7 billion, the highest level since the collapse of FTX.
The introduction of the ETH ETF narrative added further fuel to the ongoing rally. This was amplified by improved global risk sentiment and declining US Treasury yields. Altcoin + ETH volume dominance relative to BTC rose to 60%, its highest level in over a year. It is worth noting that during bull rallies, altcoin volume typically increases relative to BTC.
The surge in demand for Ethereum has also resulted in rising leverage, as reflected in the recovery of ETH open interest to early August levels. In contrast, BTC open interest has declined over the past month due to liquidations on Binance. This has caused the Chicago Mercantile Exchange (CME) to outpace Binance as the largest BTC futures market.
ETH funding rates, which act as a gauge of sentiment and bullish demand, have reached their highest levels in over a year. This is a clear indication of a significant shift in market sentiment. Both BTC and ETH 30-day volatility rose in November, reaching 40% and 50% respectively. This follows a multi-year low of around 15% during the summer months.
Renowned crypto expert Michael Van de Poppe believes that Ethereum is on the verge of a significant breakthrough. According to him, if Ethereum manages to surpass the crucial $2,150 resistance level, it could potentially signify the end of the bear market. Drawing a parallel with Bitcoin’s critical $30,000 barrier, Van de Poppe suggests that breaking through this level could pave the way for a substantial rally, potentially propelling Ethereum towards the price range of $3,100 to $3,600.
Despite the positive momentum, Ethereum has yet to touch the $2,150 resistance line. The cryptocurrency faces a pre-existing obstacle in the form of its yearly high of $2,139. This pivotal level has halted Ethereum’s bullish momentum and is acting as a formidable resistance.
As a result, Ethereum has been consolidating within a narrow range between $2,050 and $2,100 for the past three days. The upcoming days will reveal whether Ethereum can overcome its immediate resistance levels and establish a consolidated position above them. Alternatively, it may face a fate similar to Bitcoin, which failed to surpass the $31,000 level for over seven months before eventually reaching its current trading price of $36,000.
Ethereum’s recent price surge and market dynamics indicate a significant shift in sentiment and demand for the cryptocurrency. BlackRock’s involvement, along with improved risk sentiment and declining US Treasury yields, has contributed to the ongoing rally. While Ethereum faces obstacles and resistance in its path, the future performance of the cryptocurrency will largely depend on its ability to overcome these challenges and establish a consolidated position above key resistance levels. The crypto community eagerly awaits to witness how Ethereum’s journey unfolds in the coming days and weeks.
Leave a Reply