Ether (ETH) is up today, rallying 0.27% over the last 24 hours to trade at the $3,257 level. Ether’s price is up 11% over the last seven days, mirroring Bitcoin’s (BTC) 16.3% price increase over the same period.
Ether’s upside momentum can be attributed to Bitcoin reaching a more than two-year high of $57,000 and the anticipation of the Dencun upgrade.
Bitcoin breaches $57,000, bolstering Ether investor sentiment
Bitcoin rose above the $57,000 mark on Feb. 27 for the first time since Nov. 2021. As the world’s two largest cryptocurrencies are historically correlated in price, Bitcoin’s price action also bolstered investor confidence in Ether.
Following Ether’s rally, the Crypto Fear and Greed index rose to a two-week high of 79, signaling extreme greed among investors. Last month, the index averaged 54, signaling neutrality. The Crypto Fear & Greed index is a multifactorial measure of crypto market sentiment.
Adding to investor confidence, the spot Bitcoin exchange-traded funds in the United States broke an all-time high of $2.4 billion in daily trading volume on Feb. 26, according to Eric Balchunas, a senior ETF analyst at Bloomberg.
It’s official..the New Nine Bitcoin ETFs have broken all time volume record today with $2.4b, just barely beating Day One but about double their recent daily average. $IBIT went wild accounting for $1.3b of it, breaking its record by about 30%. pic.twitter.com/MiCs1rzttM
— Eric Balchunas (@EricBalchunas) February 26, 2024
Bitcoin’s current pre-halving rally is having a significant impact on the funds flowing into Ether, which will likely rotate into smaller altcoins over the next weeks, according to a Feb. 27 X (formerly Twitter) post by pseudonymous crypto analyst Rekt Capital.
“We’re already seeing this Bitcoin Pre-Halving Rally tremendously impact money flow into ETH. ETH has rallied +43% this month”
The last time $ETH experienced such an explosive Monthly Candle was in mid-2021 and this was near the Bull Market peak
ETH already rallying to such an extent this early in the cycle just shows that this cycle is going to be on another level#ETH #Crypto #Ethereum pic.twitter.com/053hxreGeR
— Rekt Capital (@rektcapital) February 27, 2024
Related: MicroStrategy adds 3K BTC as Bitcoin ETFs are poised to surpass gold ETFs
Ether futures open interest on Binance reaches all-time high
Ether futures open interest on Binance, the world’s largest cryptocurrency exchange, reached a new all-time high of $3.88 billion on Feb. 26, according to Coinglass. Binance’s previous all-time high of $3.31 billion in Ether open interest was breached on Nov. 3, 2021, when Ether was trading above $4,400.
The increased demand for Ether leverage has caused the total Ether futures open interest to rise to $10.54 billion, according to Coinglass data. Ethereum’s open interest hit an all-time high of over $11 billion in Nov. 2021, shortly before Ether fell 55% from its all-time high of $4,891.
Related: Crypto’s next leap: Ether ETFs through Keyrock’s kaleidoscope
Dencun upgrade is just around the corner
Besides Bitcoin’s rally, Ether’s price action can also be attributed to anticipation around the Dencun upgrade, scheduled for March 13.
The upgrade aims to reduce transaction costs and increase the scalability of the Ethereum network by introducing the concept of proto-danksharding. This mechanism seeks to make transaction data temporarily available in a more cost-effective “compressed” format.
The Dencun upgrade is the primary reason for Ether’s positive price action, according to a Feb. 23 report by Grayscale Research. The report states:
“With Ethereum’s planned Dencun upgrade in March, Ethereum is on the cusp of “growing up” through a pivotal transformation aimed at addressing its scalability challenges. We believe that the recent price performance reflects the market’s anticipation of this upgrade, as Ethereum (up 26% YTD) has outperformed the broader Smart Contract Platforms Sector (up 3% YTD) since January 1st, 2024.
Related: Ether ETF verdict: Gensler stays muted
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Also Read More: World News | Entertainment News | Celebrity News
