Ethereum (ETH) has been under selling pressure in the recent past, trading below the $3,500 mark. However, there are several signs that point towards a possible price rebound of Ethereum soon. Here are five possible reasons why ETH may begin to rise in the near future.
Ethereum has seen an increase in active addresses, which are now at their highest in three months at 617,170. This increase, as pointed out by crypto analyst Ali Martinez, shows that more users are actively using the network.
An increase in active addresses is usually associated with higher transaction volumes, which signify improved market sentiment. With more users coming into the Ethereum network, the requirement for ETH may increase, which could positively impact the price of ETH.
The ETH/BTC trading pair has held above the important 0. 05 BTC level, which can be interpreted as the strengthening of Ethereum in relation to Bitcoin. Market analyst Michaël van de Poppe also stressed the significance of this level, stating that as long as ETH remains above this level, a trend reversal is expected. Sustaining this ratio shows that investors still have the faith in the future of Ethereum and this could result in a price recovery.
Revisions to the S-1 filings by leading financial institutions for Spot Ethereum ETFs have positively impacted the Ethereum market. BlackRock, Fidelity, Grayscale and VanEck among other firms have made comprehensive amendments to the SEC showing their intention to launch these funds.
The approval of these ETFs could lead to a significant inflow of institutional capital into Ethereum. Bloomberg analyst Eric Balchunas highlighted the competitive pricing in these filings as a positive sign. There is a high expectation of an approval of an ETF that points towards a large amount of money being pumped into the Ethereum market.
Also, the application for an Ether Option Income Strategy ETF by YieldMax is another factor that depicts increasing interest in Ethereum-related derivative products. This proposed ETF is to earn income by utilizing a synthetic covered call option writing strategy and using the volatility of the Underlying Spot Ethereum ETFs. Despite the fact that this new financial tool will not invest in Ethereum directly, it can still open new doors for investors, offering new opportunities for trading and generating income.
There is also an increasing trend in the institutional adoption of Ethereum. Standard Chartered, an international bank, wants to get into the Bitcoin and Ethereum trading business by opening a trading desk. This move that is set to mark the bank as the first to venture into spot crypto trade is done through the FX trading unit and will be based in London.
This is evident through the participation of such a big financial institution like Standard Chartered Banking Corporation in the acceptance of cryptocurrencies as a form of investment. This institutional participation may improve market liquidity and increase investor confidence, which might, in turn, increase the price of Ethereum.
However, it has been performing quite well even in the recent past when the market trend was bearish. At the time of writing, ETH is trading at around $3,492 and has been range-bound but is likely to break through $3,582. Establishing this as a support level may open the door to a rise to $3,700.
Given that 87% of the circulating supply is profitable at the moment, there is still potential for increasing before reaching the critical 95% market top. This suggests that Ethereum has not reached its peak, leaving room for more gain in price. Those who are still holding onto their ETH are probably anticipating a rise, which may lead to a breakout from the consolidation pattern.