Ethereum enthusiasts witness a surge in bullish sentiments despite significant hurdles in institutional investment and notable market volatility on March 6.
An analysis of market trends sheds light on what this display of confidence among speculative traders could imply for Ethereum’s ongoing price rally in the near term.
Ethereum Price Rebounds to $3,900 Amidst Adverse Conditions
The price of Ethereum soared by 9%, leaping from $3,500 to a peak of $3,900 within the daily timeframe on March 6. The recent surge in ETH price is noteworthy, as it defied downward pressure from two major adverse events.
The cryptocurrency markets experienced considerable volatility as investors, who booked profits when BTC reached a new all-time high on March 5, inadvertently triggered over $1 billion in liquidations.
Despite these significant events, Ethereum added another $48 billion to its market cap within the daily timeframe on March 6, surpassing $3,900 for the first time in three years.
Previously, speculation suggested that the SEC would make a decision as early as April 2024. However, the latest development indicates that the May 7 deadline on Vanguard’s application is now the primary date for a potential ETH ETF approval decision.
The launch of the Ethereum ETF is expected to unleash institutional interest, akin to what was observed in the Bitcoin markets over the past month.
Normally, news of a decision delay from the SEC could weigh on the price of the underlying asset. Surprisingly, Ethereum defied bearish sentiment by surging 9% within 24 hours of the delay, sparking optimism in the community.
Bullish Traders Maintain Elevated ETH Funding Rates
The prevailing bullish sentiments and positive sentiment surrounding the Ethereum ecosystem ahead of the upcoming London upgrade were key catalysts for ETH’s resilient price performance on March 6.
Market data indicates that speculative ETH traders have maintained their bullish conviction, even as BTC and other large-cap altcoins experienced significant liquidations.
Santiment’s Funding Rates metric reveals a daily aggregate of fees paid between holders of perpetual futures contracts for a specific crypto asset. Changes in funding rate trends provide insights into speculative traders’ inclinations regarding short-term price movements.
Despite the negative headwinds on March 6, ETH bulls remained steadfast in their positions, doubling down on bullish positions and driving the funding rate to a 2024 peak of 0.09%.
Elevated levels in funding rates suggest that traders are largely confident of further short-term price increases and, consequently, offer higher fees to keep contracts open.
Notably, ETH’s price swiftly surged above $3,900 within the subsequent 24 hours following the spike in funding rate. If this uncommon market trend persists, according to historical patterns, it’s only a matter of time before ETH’s price breaches the $4,000 mark.
Ethereum Price Prediction: Retesting $4,500 Only a Matter of Time?
While Ethereum’s journey towards having a listed ETF in the U.S. may have encountered a setback, its path to reclaiming the $4,000 price level appears unhindered, given the growing bullish sentiment observed in the ETH derivatives markets.
Profitable holders are often reluctant to sell during a bullish market phase; hence, ETH is likely to maintain a relatively high support level above $3,500 as it consolidates before its next upward move.
However, in the event of another bullish surge, the bulls now have only the $3,992 resistance level to overcome en route to new highs above $4,000.
By Andrej Kovacevic
Updated on 23rd April 2024