Ethereum (ETH), the second-largest cryptocurrency, has experienced a substantial surge in its price over the past month. The recent bullish trend in the crypto market, coupled with the involvement of BlackRock, has propelled ETH to reach its highest point of the year at $2,139.
Outperforming Both Bitcoin and Altcoins
According to data from market provider Kaiko, ETH has outperformed BTC and numerous altcoins in recent weeks, indicating a notable shift in market dynamics. Kaiko’s report underscores how ETH faced challenges in gaining momentum over the past year, despite successful upgrades such as The Merge in April.
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The sentiment around ETH underwent a significant transformation when BlackRock filed for a spot ETH exchange-traded fund (ETF), resulting in a reversal in the ETH to Bitcoin (BTC) ratio. This had a substantial impact on the market, leading ETH prices to surge above $2,000 for the first time since April. Additionally, daily spot trade volumes reached $7 billion, marking the highest level since the collapse of FTX.
Ethereum’s Rise Amidst the ETF Narrative
The narrative surrounding the ETH ETF further fueled the ongoing rally, buoyed by improved global risk sentiment and declining US Treasury yields. The dominance of altcoin + ETH volume relative to BTC has risen to 60%, reaching its highest level in over a year, a typical occurrence during bull rallies.
This surge in demand has also contributed to an increase in leverage, reflected in the recovery of ETH open interest to early August levels. Notably, BTC open interest has declined over the past month due to liquidations on Binance, resulting in the Chicago Mercantile Exchange (CME) surpassing Binance as the largest BTC futures market.
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Additionally, ETH funding rates, serving as a gauge of sentiment and bullish demand, have reached their highest levels in over a year, indicating a significant shift in sentiment. In November, both BTC and ETH 30-day volatility rose to 40% and 50%, respectively, following a multi-year low of around 15% during the summer months.
Expert Predictions on ETH’s Future
Renowned crypto expert Michael Van de Poppe anticipates a significant breakthrough for ETH. If Ethereum manages to surpass the crucial $2,150 resistance level, according to Van de Poppe, it could signal the end of the bear market. Drawing a parallel with Bitcoin’s critical $30,000 barrier, breaching this level for Ethereum could pave the way for a substantial rally, potentially propelling ETH towards the price range of $3,100 to $3,600.
However, Ethereum has yet to breach the $2,150 resistance line, encountering a pre-existing obstacle in the form of its yearly high of $2,139. This level has impeded the cryptocurrency’s bullish momentum, acting as a formidable resistance. Consequently, Ethereum has been consolidating within a narrow range between $2,050 and $2,100 for the past three days.
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The upcoming days will reveal whether Ethereum can overcome its immediate resistance levels and establish a consolidated position above them, or if it will face a fate similar to Bitcoin, which struggled to surpass the $31,000 level for over seven months before reaching its current trading price of $36,000.