Ethereum (ETH) continued its upward trend on Wednesday, rising 10% in 24 hours to surpass the vaunted $2,600 level. Market observers attribute this surge to a confluence of factors, primarily fueled by expectations of an upcoming Ethereum exchange-traded fund (ETF) following the expected approval of a Bitcoin ETF in the United States.
In a historic move that cryptocurrency enthusiasts hope will attract more individual and institutional investors to the market, the U.S. Securities and Exchange Commission approved the first spot Bitcoin exchange-traded fund on Thursday.
Ethereum ETF Buzz Sparks Strategic Moves
“There is a noticeable trend pushing the Ethereum ETF to the forefront,” Alex Onufriychuk, CEO of Kaminari, said in a Telegram message. This sentiment is consistent with the common belief that Ethereum, the second-largest cryptocurrency by market capitalization, will be the next candidate for an ETF after Bitcoin.
Adding fuel to the fire, the prominent investor known as the ‘whale’ in the cryptocurrency world took the strategic move of transferring 9,705 ETH (about $23 million) from Binance to Compound. This was followed by a $12 million Tether (USDT) loan that appears to have been used to accumulate additional ETH. The whale then executed three profitable ETH trades, generating approximately $5 million in profit.
This decisive action signals two signals: confidence in Ethereum’s future and the possibility of profit taking, which could lead to near-term volatility. Despite the risks, whale activity has bolstered positive market sentiment.
Ethereum currently trading at $2,607.8 on the daily chart: TradingView.com
Further proving this optimism, Ethereum’s network metrics have surged. Both network growth and token velocity have increased, indicating increased interest in new addresses and increased token movement. These on-chain indicators show a promising picture for ETH’s future.
ETH futures soar amid ETF optimism
Adding to the bullish case, open interest on the ETH futures contract has increased 15% in recent days, reaching $4.57 billion at the time of writing. This means more traders will enter the market and expect a significant price increase following the potential ETF approval.
Ethereum vs. Bitcoin Open Interest | Source: Velo Data
Crypto traders reportedly expect Ethereum prices to rise following the favorable ETF ruling, even as Bitcoin is receiving more media attention. If this situation develops, the price of ETH could soon surpass $2,600.
However, it is important to remember that cryptocurrency markets are still highly volatile and unexpected factors can still affect prices.
The Ethereum ETF approval timeline is uncertain and regulatory hurdles may cause delays. Additionally, broader market conditions and news about Ethereum developments may also play a role.
Investors should carefully consider their risk tolerance and conduct thorough research before making any investment decisions, especially in the dynamic and unpredictable world of cryptocurrency.
Featured image from Medium
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