“Ethereum, a decentralized cryptocurrency platform, experiences a significant surge in popularity and adoption.”
Ethereum (ETH) came close to reaching its 2024 peak on February 12th, with a price of $2,633, while Bitcoin (BTC) surpassed $50,000 for the first time since 2022. Although Bitcoin attracted media attention for breaking the $50,000 barrier, Ethereum bulls are making strategic moves to potentially achieve a similar breakout. The question now is whether the price of ETH will reclaim $3,000 in the coming days.
There has been a noticeable increase in bullish bets among Ethereum derivative traders, as the price action of Ethereum and Bitcoin has been closely correlated for many years. This correlation has sparked optimism that BTC reaching the $50,000 milestone could pave the way for a bullish upswing in ETH.
In the ETH derivatives markets, speculative traders have been placing leveraged bullish bets at an intensified rate. CryptoQuant’s funding rate, which represents the percentage of fees paid by perpetual futures traders to keep their positions open, shows that the ETH funding rate rose to 0.4% on February 13th. This indicates that speculative traders are placing more leveraged bets on an imminent ETH price upswing. In fact, this is the highest funding rate in over 40 days, dating back to January 8th when investors were optimistic about the Bitcoin spot ETF verdict.
With ETH currently trading just below the $2,660 mark, the surge in ETH funding rates following BTC crossing the $50,000 milestone suggests a strong bullish outlook. This indicates that an Ethereum price rally towards $3,000 could be on the horizon.
US-based corporate entities are also ramping up their purchases of ETH, as they aim to secure an ETH spot ETF approval in the first half of 2024. On February 12th, asset manager Frank Templeton became the latest company to file ETH derivative applications with the US Securities and Exchange Commission (SEC). This institutional buying pressure is reflected in CryptoQuant’s Coinbase Premium index, which tracks the difference in Ethereum prices between Coinbase Pro and Binance. Positive values of the Coinbase Premium index indicate that ETH prices on Coinbase have consistently been higher than on Binance, signaling that whales and institutional investors are driving the buying pressure on Coinbase Pro.
Historically, this pattern of increased buying pressure from whales has often preceded major ETH price rallies. Therefore, it is not surprising that ETH has gained 11% since the whales began buying on February 8th. Combined with the bullish sentiment among speculative traders, this buying trend could potentially push ETH towards its next target of $3,000.
However, the bulls may face a major obstacle at the $2,750 range. If they can overcome this resistance level, it could generate the momentum needed to reach the $3,000 target. On the other hand, a negative trend could occur if the bears force a downswing below $2,000, although this scenario seems unlikely in the short-term. With 3 million holders acquiring 6.2 million ETH at an average price of $2,300, there is a solid short-term support level around $2,350.
In summary, the rising funding rates and buying pressure from US-based whales have put ETH on an upward trajectory. Based on historical patterns, it is likely that Ethereum will continue to climb towards the $3,000 target. However, the bulls will need to overcome the resistance at $2,750 to gain the necessary momentum.
