The anticipation of Ethereum exchange-traded funds (ETFs) being approved in the United States has led to a significant increase in the price of Ether (ETH) over the past two days, reaching its highest point since March 15.
While the price of ETH has slightly retreated from its peak of $3,800, the possibility of spot Ethereum ETF approval, along with fundamental factors and on-chain metrics, suggests that the upward trend for altcoins remains intact.
One factor supporting the rise of Ether is the increasing number of long ETH positions in the futures market. Data from on-chain market intelligence firm CryptoQuant shows that Ethereum’s total open interest in the derivatives market surged from 2.8 to 3.2 million ETH in just a few hours on May 20, following rumors of a potential reversal by the United States Securities and Exchange Commission (SEC) regarding the approval of spot Ethereum ETFs. This marks the highest open interest since January 2023.
According to CryptoQuant analysts, the open interest in ETH has reached a record-high of $14.68 billion in U.S. dollar terms. This high open interest indicates a strong underlying trend and suggests that investor confidence in Ethereum may continue.
The potential approval of a spot Ethereum ETF this week has led to discussions among analysts about the potential impact on the price of Ethereum. CryptoQuant analysts have observed that there are now more buy orders for ETH in the perpetual futures market compared to other types of orders. The taker-buy ratio, which measures the ratio of buy orders to sell orders, is currently above one, indicating a higher volume of buy orders.
Additional data from CryptoQuant shows that traders now prefer to have more exposure to Ethereum compared to Bitcoin. The Ethereum-Bitcoin Open Interest ratio has spiked from 0.54 to 0.67 on May 20, indicating that Ethereum’s total open interest is 67% of Bitcoin’s.
Furthermore, the ETH/BTC trading pair has seen an increase from a low of $0.04572 on May 20 to a two-month high of $0.06471 on May 21. This suggests that the price of Ether is strengthening against Bitcoin.
The relative strength index, which measures the strength and momentum of a trend, is currently at 68 for the ETH/BTC pair, indicating that Ethereum’s upward trend remains intact.
Increased demand for ETH has also been observed, with data from CryptoQuant showing a surge in ETH buying by Permanent Holders, which are defined as addresses that accumulate ETH and never sell.
Market intelligence firm Santiment has noted that while sentiment toward Bitcoin and Solana remains bearish, the hype around Ethereum has reached its highest level since September 2023.
The Crypto Fear and Greed Index, which measures the sentiment of retail investors, has risen to the “extreme greed” zone at 76, indicating increasing positivity towards cryptocurrencies. If the SEC approves spot Ethereum ETFs this month, it is expected that the price of ETH will continue its upward trend.
Please note that this article does not provide investment advice or recommendations. Readers are advised to conduct their own research before making any investment or trading decisions.