Ethereum ATH Soon? Key Factors Point to Major Rally

• Trump’s crypto firm adds $48M in Ethereum, now holding 28,612 ETH.
• Positive funding rates signal strong demand for ETH longs.
• Options markets show long-term optimism despite short-term caution.
• CPI data and pro-crypto sentiment boost ETH’s $4,000 rally prospects.

Ethereum (ETH) is setting the stage for a potential breakout, with key market indicators suggesting that the cryptocurrency is on the cusp of a significant rally.

Recent data shows ETH’s price has already rallied from around $3,000 at the beginning of the month to $3,500, and analysts believe that the next stop could be a major milestone: $4,000. Here’s why.

Ethereum’s Recent Rally A Sign of Things to Come

Ethereum’s price momentum has been impressive, with ETH rising to its highest level in 2023, briefly hitting $3,500 earlier this month.

However, it has faced some resistance, losing momentum after reaching that peak. Despite the pullback, analysts are still bullish on ETH’s prospects, citing a combination of market factors that point to further price gains.

According to a recent report published by Bybit and research firm Block Scholes, several key metrics suggest strong demand for Ethereum, which could propel its price to new heights.

One of the primary factors driving this optimism is the positive perpetual swap funding rate. Bybit’s report indicates that perpetual swaps have fluctuated in line with spot prices, showing a strong demand for long positions.

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This is a notable development because it indicates that investors are betting on ETH’s price rising despite some downturns. In other words, there is a lack of interest in short positions, and liquidations are helping fuel the bullish trend. This suggests that ETH’s upward momentum could continue if these trends persist.

In addition to the positive derivatives market signals, the crypto options market is also showing signs of optimism. Although traders are hedging against short-term price fluctuations, long-term options contracts reveal a bullish skew.

This shows that many investors are betting on Ethereum’s long-term price growth, with many anticipating a major rally.

Furthermore, the release of recent Consumer Price Index (CPI) data has triggered a market shift. Following the data release, Bitcoin (BTC), Ethereum, and other altcoins saw a boost, signaling that investor sentiment is turning more favorable.

The “bullish volatility smile” observed in the options market further supports this uptrend, with traders increasingly speculating on price surges.

Trump’s Inauguration to Boost Ethereum to $4,000

One major development fueling ETH’s potential rally is the recent purchase of $48 million Ether by World Liberty Financial (WLF), the crypto firm linked to Donald Trump.

According to data from Arkham Intelligence, WLF acquired 14,403 ETH over an eight-hour period on Sunday, at an average price of $3,300 per token. This brings WLF’s total Ethereum holdings to 28,612 ETH, valued at $109 million at current prices.

The incoming inauguration of pro-crypto President-elect Donald Trump. The market is hopeful that a new administration could introduce less stringent crypto regulations, potentially spurring more institutional investment into the space.

This positive sentiment around Trump’s presidency has already led to a surge in altcoins, including ETH and BTC. A more crypto-friendly stance from the U.S. government could be the catalyst ETH needs to reclaim higher price levels.

Ethereum to Hit ATH Soon?

As Ethereum continues to show strong momentum, many analysts are eyeing the $4,000 price mark as the next major target.

The combination of positive derivatives data, strong long-term investor sentiment, and favorable macroeconomic conditions are aligning to create a perfect storm for a potential ETH rally.

Although Ethereum has experienced some volatility in recent weeks, the overall trend remains bullish. With the market still digesting the impact of recent CPI data and Trump’s pro-crypto stance, Ethereum could see another leg up in the near future.

ETH Vs Altcoins

Ethereum is not alone in its positive market performance. Other altcoins, such as Solana (SOL), XRP, and Litecoin (LTC), have also experienced bullish momentum. XRP, for example, surged 40% over the past week, while Solana hit an all-time high of nearly $300.

However, Ethereum’s strong fundamentals and the upcoming political developments make it a top contender to lead the next wave of crypto price rallies. With Ethereum’s robust infrastructure and growing adoption, many believe that $4,000 is within reach.