Ethereum’s price has remained steady, marking a significant upward trend over the past four days and reaching its highest point since early July.
The cryptocurrency has surged by 20% from its lowest point this month, indicating a bullish market trend. This rise is driven by three main factors.
The first factor is the increasing optimism surrounding Donald Trump’s potential victory in the upcoming U.S. presidential election.
Trump, seen as a crypto-friendly candidate, has gained endorsements from influential figures like Elon Musk and Bill Ackman.
His stance on supporting the crypto industry, selling NFTs, and opposing Central Bank Digital Currencies (CBDCs) has garnered him substantial support within the crypto community.
The second catalyst is the anticipated approval of several spot Ethereum ETFs by the Securities and Exchange Commission (SEC).
Major companies like VanEck, BlackRock, and Invesco have submitted their final filings, with analysts predicting approvals could come as soon as this week.
The approval of these ETFs is significant for Ethereum, being the second-largest cryptocurrency, although investors would need to account for fees and missed staking rewards.
The third factor contributing to Ethereum’s price rise is the declining volume of ETH held on exchanges.
The supply has dropped to a record low of 16.76 million, compared to over 32.5 million in July 2016.
This reduction in exchange balances indicates that Ethereum is becoming scarcer as ETF approvals loom, increasing its value.
Additionally, Ethereum’s price has been bolstered by rising open interest in futures.
Data from CoinGlass shows that open interest reached over $13.4 billion on Monday, up from this month’s low of $11.66 billion. Most of this interest is from platforms like Binance, Bybit, and Bitget.
Ethereum’s recent rebound occurred after finding strong support at around $2,850, a critical level that had previously served as a low point in April and May.
This support level, coupled with flipping the 200-day Exponential Moving Average (EMA), suggests that the rally may continue. The accumulation and distribution indicator also shows increased investor buying activity.
The next key level to watch is the psychological threshold of $3,500.
