Ether (ETH) has experienced a slight rally, with a 0.27% increase in the last 24 hours, bringing its price to $3,257. Over the past week, Ether has seen an 11% increase, following the 16.3% price surge of Bitcoin (BTC) during the same period.
This upward movement of Ether can be attributed to Bitcoin reaching a two-year high of $57,000 and the anticipation surrounding the Dencun upgrade.
Bitcoin’s surge above $57,000 on February 27th has also boosted investor confidence in Ether, as the prices of these two largest cryptocurrencies are historically correlated.
As a result of Ether’s rally, the Crypto Fear & Greed index has risen to 79, indicating extreme greed among investors. Last month, the index averaged 54, reflecting neutrality. This index serves as a multifactorial measure of crypto market sentiment.
Additionally, the spot Bitcoin exchange-traded funds in the United States achieved an all-time high of $2.4 billion in daily trading volume on February 26th, further contributing to investor confidence.
According to a post by pseudonymous crypto analyst Rekt Capital, Bitcoin’s current pre-halving rally is significantly impacting the flow of funds into Ether. It is expected that these funds will rotate into smaller altcoins in the coming weeks. In fact, Ether has already rallied 43% this month.
Ether futures open interest on Binance, the world’s largest cryptocurrency exchange, has reached a new all-time high of $3.88 billion, surpassing the previous record of $3.31 billion set on November 3rd, 2021.
The demand for Ether leverage has led to a total Ether futures open interest of $10.54 billion, according to data from Coinglass. In November 2021, Ethereum’s open interest reached over $11 billion before Ether’s price dropped by 55% from its all-time high of $4,891.
Aside from the Bitcoin rally, Ether’s price action can also be attributed to the anticipation surrounding the Dencun upgrade, scheduled for March 13th. This upgrade aims to reduce transaction costs and increase the scalability of the Ethereum network through proto-danksharding, a mechanism that temporarily compresses transaction data to make it more cost-effective.
According to a report by Grayscale Research, the Dencun upgrade is the primary reason for Ether’s positive price movement.
Please note that this article does not provide investment advice or recommendations. Readers should conduct their own research and assessment before making any investment decisions.