The price of Ether (ETH) has surged by over 26% in the past two days, reaching its highest level since March 15, due to increasing expectations of Ethereum exchange-traded funds (ETFs) being approved in the United States. Although the price has slightly pulled back from its peak of $3,800, the possibility of a spot Ethereum ETF approval, along with fundamental factors and on-chain metrics, suggest that the upward trend for the altcoin remains intact.
One factor supporting the rise in Ether’s price is the increasing open long ETH positions in the futures market. Data from CryptoQuant shows that Ethereum’s total open interest in the derivatives market rose from 2.8 to 3.2 million ETH in just a few hours on May 20, following rumors of the SEC reconsidering the approval of spot Ethereum ETFs. This surge in open interest, the highest since January 2023, indicates a strong underlying trend and investor confidence in Ethereum.
Analysts at CryptoQuant also noted that there are now more buy ETH orders in the perpetual futures market compared to other types of orders. The taker-buy ratio, which measures the size of buy orders compared to sell orders, is above one, indicating a preference for buying ETH. Additionally, traders now have a greater exposure to Ethereum relative to Bitcoin, as shown by the Ethereum-Bitcoin Open Interest ratio, which spiked from 0.54 to 0.67 on May 20. This suggests a shift in preference towards Ether.
Furthermore, data from TradingView reveals that the ETH/BTC trading pair has seen a significant increase, rising 19.6% from a low of $0.04572 to a two-month high of $0.06471 on May 21. This indicates a strengthening of Ether’s price against Bitcoin. The relative strength index at 68 further supports the uptrend of ETH/BTC, suggesting Ethereum’s continued upward movement.
Increased demand for ETH has also been observed, with CryptoQuant data showing a rise in buying from Permanent Holders following the rumors of ETF approval. Permanent Holders, defined as addresses that accumulate ETH and never sell, have increased their buying activity. Additionally, market intelligence firm Santiment noted that the hype around Ethereum has reached its highest level since September 2023.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment decisions.