Ethereum Bulls May Propel Price To $3,100, Analyst Suggests

Ethereum (ETH), the second-largest cryptocurrency, has seen a significant price increase over the past month. The recent bullish rush in the crypto market, coupled with BlackRock’s involvement, has pushed ETH to its year-to-date high of $2,139.

According to market data provider Kaiko, ETH has outperformed BTC and many altcoins in recent weeks, signaling a shift in market dynamics.

Kaiko’s report highlights how ETH struggled to gain momentum over the past year, despite successful upgrades such as The Merge in April. 

However, the sentiment around ETH changed dramatically when BlackRock filed for a spot ETH exchange-traded fund (ETF), leading to a reversal in the ETH to Bitcoin (BTC) ratio.

The impact on the market was substantial, with ETH prices surging above $2,000 for the first time since April. Additionally, daily spot trade volumes reached $7 billion, the highest level since the collapse of FTX. 

The ETH ETF narrative provided further impetus to the ongoing rally, amplified by improved global risk sentiment and declining US Treasury yields.

The dominance of altcoin + ETH volume relative to BTC has risen to 60%, marking its highest level in over a year. During bull rallies, altcoin volume typically increases relative to BTC. 

This surge in demand has also led to rising leverage, as 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) outpacing Binance as the largest BTC futures market.

Furthermore, ETH funding rates, 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.

Renowned crypto expert Michael Van de Poppe believes that ETH is on the cusp of a significant breakthrough. According to Van de Poppe, if Ethereum manages to surpass the crucial $2,150 resistance level, it could signify the end of the bear market. 

Drawing a parallel with Bitcoin’s critical $30,000 barrier, Van de Poppe suggests that breaching this level could pave the way for a substantial rally, potentially propelling Ethereum towards the price range of $3,100 to $3,600. 

However, Ethereum has yet to touch the $2,150 resistance line, as it faces a pre-existing obstacle in the form of its yearly high of $2,139. This pivotal level has halted the cryptocurrency’s bullish momentum, 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 forthcoming 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 reaching its current trading price of $36,000.

Featured image from Shutterstock, chart from TradingView.com