Ethereum
Why Ethereum (ETH) Price Rise Beyond $3,800 Is Imminent
Ethereum (ETH) has recently seen a price increase, attributed to the growing expectations of spot Ethereum ETFs pending approval in the United States. This optimistic outlook has led to growth ETH Price by more than 25% in just two days, reaching levels not seen since mid-March. Although there was a brief dip to around $3,800, several crucial signs indicate that this drop is only temporary and that Ethereum is likely to continue rising.
Current ETH Price Market Performance
Ethereum price is currently trading at $3,870.25, having seen a slight increase of 3.83%. ETH has also shown a medium to long-term bullish trend with a value increase of 28.96% and 21.97%, respectively over the past week and month. Since the beginning of the year, the coin has seen an increase of 108.46%. Despite this strong performance, the value of ETH is still 22.54% below its all-time high of $4,891.70, reached on November 16, 2021.
Despite having a market cap of $464.38 billion, making it the second largest cryptocurrency by market cap, ETH saw a 10.44% decrease in trading volume over 24 hours to reach $26.88 billion.
Key Factors Supporting Ethereum’s Upward Price Trend
Here’s why Ethereum’s bullish momentum is expected to continue.
1. Growing open interest in ETH price signals confidence
One of the most compelling indicators of Ethereum’s future price growth potential is the growing open interest in ETH futures. CryptoQuant reported that in a matter of hours on May 20, open interest in ETH increased from 2.8 million to 3.2 million. This increase occurred at the same time as speculation was circulating about the SECOND possibly giving the green light to Ethereum ETFs.
The all-time high of $14.68 billion in US dollar open interest shows investors’ strong belief in the future of Ethereum. A high level of open interest generally indicates a strong trend and growing investor confidence. Perpetual futures market traders display strong sentiment by aggressively initiating long positions.
2. Growing demand among permanent incumbents
Another critical factor supporting Ethereum’s bullish outlook is the increased accumulation of permanent holders. These are addresses that systematically buy and hold ETH without selling it. On May 20, amid rumors of ETF approval, permanent holders purchased over 100,000 ETH, the highest daily level since September 2023, according to CryptoQuant.
This behavior demonstrates long-term confidence in the value of Ethereum, further reinforced by positive market sentiment. Popular analysts and market intelligence companies like Feeling have observed increased bullish sentiment towards Ethereum, with ETH whale accumulation reaching significant levels.
3. Growing preference for ETH over BTC
The potential approval of an Ethereum spot ETF has not only generated excitement, but also shifted investor interest towards ETH. CryptoQuant the data indicates a taker-to-call ratio greater than one, showing more buy orders than sell orders in perpetual futures contracts. The price rise is also supported by the Ethereum-Bitcoin Open Interest ratio, which increased from 0.54 to 0.67, showing a preference for Ethereum over Bitcoin among traders.
Additionally, there was a significant increase in ETH/BTC trading pair, climbing 18.8 from $0.04572 to 0.05430724, indicating an increase in the value of Ethereum against Bitcoin.
Conclusion
Growing open interest, trader preference shifting to Ethereum, and growing demand from long-term holders create a solid foundation for continued bullish momentum in the ETH price. Although Ethereum is currently holding at $3,800, key indicators suggest this stability may be short-lived. The SEC’s approval of Ethereum spot ETFs could serve as an important catalyst, driving ETH prices higher and strengthening its positive trajectory. The market is eagerly awaiting this progress, which indicates that Ethereum is ready to take another step forward.