Ethereum (ETH), the leading altcoin, experienced a significant rally on Monday, climbing from $3,810 to $3,940 during Asian trading hours. This surge is likely attributed to Donald Trump’s recent pro-crypto comments over the weekend.
Ethereum on the Rise
The price increase follows a notable shift by the US Securities and Exchange Commission (SEC) towards allowing crypto-linked exchange-traded funds (ETFs). This policy change has contributed to a 26% surge in Ether over the past week.
Today’s bullish price action suggests that market participants are favoring Ethereum over Bitcoin, anticipating strong institutional demand once the ETH spot ETF becomes available. Although experts are optimistic, a significant breakout is unlikely until there is more clarity on the S-1 approvals and inflow data. The opening of the Ether ETF for trade seems imminent, but until then, ETH front-end volatility might remain higher than BTC, with ETH skew favoring calls.
The enthusiasm for Ether ETFs mirrors the excitement seen with the launch of US spot Bitcoin ETFs in January, which have amassed $59 billion in assets. However, Ether’s lower profile compared to Bitcoin makes investor demand harder to predict.
Ethereum is up another 2.5% in the last 24 hours and has surged more than 71% year-to-date (YTD). Currently, ETH is trading at an average price of $3,904, just shy of breaching the $4,000 mark. Its 24-hour trading volume has increased by 64%, reaching $17.8 billion.
Options Market Sentiment
The options market reflects a bullish outlook, with significant bets placed on Ether reaching $5,000 or higher. Ether’s record high is $4,866, achieved in November 2021. These optimistic bets are also accompanied by expectations of increased volatility.
The T3 Ether Volatility Index, which measures expected 30-day price swings based on options prices, indicates speculators anticipate larger movements in Ether compared to Bitcoin.
Open interest in CME Ether futures contracts, which indicate future buying or selling commitments, provides insights into institutional demand for regulated crypto exposure. While interest in CME Ether futures is growing, it remains significantly lower than for CME Bitcoin futures. This suggests less institutional engagement with Ether, potentially changing with the introduction of Ether ETFs.
As Ethereum continues its upward trajectory, driven by bullish market sentiment and the anticipated launch of Ether ETFs, the question remains: Can ETH reach $5,000? With growing institutional interest and positive regulatory developments, the future looks promising for Ethereum. However, market participants should stay vigilant and monitor upcoming regulatory approvals and market inflows to gauge the sustainability of this bullish trend.
