Ethereum (ETH), the world’s second-largest cryptocurrency, is experiencing a surge in price following the US Securities and Exchange Commission’s (SEC) green light for several Ethereum-based Exchange Traded Funds (ETFs).
This week began with a strong showing for Ethereum, recording a 3.7% increase in the past 24 hours and pushing its price close to the crucial $4,000 mark. This represents a significant climb from recent fluctuations, with Ethereum trading at $3,751.60 at the time of writing.
Analyst Projects $4,500 Target
Arthur Cheong, CEO of DeFiance Capital, believes Ethereum could reach $4,500 before its spot ETFs begin trading, potentially by July or August. He draws comparisons to the 2017 crypto boom, suggesting that similar to Bitcoin ETFs, where over 70% of positions are held by retail investors, the introduction of Ethereum ETFs could attract a significant influx of retail participation.
The market is undeniably enthusiastic about Ethereum’s future. However, it’s important to remember that these projections are speculative. The actual price trajectory hinges on multiple factors, including the broader economic climate and investor sentiment.
Furthermore, the regulatory landscape isn’t completely clear. While the SEC approved the initial applications (19b-4) for Ethereum ETFs, the critical S-1 forms still require approval.
Bullish Trends Beyond Price
Despite the regulatory hurdles, Ethereum exhibits robust growth not just in price but also in fundamental on-chain metrics. Data suggests a surge in price volatility, indicating heightened trading activity and interest. Additionally, an uptick in new Ethereum addresses points to a growing user base.
Rising Open Interest and Network Activity
Open Interest, a measure of outstanding derivatives contracts, has also spiked, reflecting an active derivatives market with increased trading volumes. This signifies not only increased liquidity but also heightened speculative interest. It’s crucial to remember that higher Open Interest also implies greater market leverage, which can amplify both gains and losses.
Technical Analysis Hints at Further Gains
Technical analysis of Ethereum’s daily chart reveals a recent breakout above the $3,700 resistance level, now acting as support. This suggests strong bullish momentum, potentially driving further price increases. Additionally, a significant decrease in Ethereum’s Network Value to Transaction (NVT) ratio suggests the asset might be undervalued, potentially indicating an upcoming price rise.
Also Read: Will Spot Ether ETFs Disappoint? Industry Skeptical Despite Regulatory Greenlight
While the future remains uncertain, the SEC’s approval of Ethereum ETF applications and Ethereum’s strong underlying trends paint a promising picture for the “king of altcoins.”
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
