- November 13, 2023
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
Ethereum price is up today as excitement over a potential spot ETH ETF and the price holding above the key $2,000 level motivate traders.
Ether (ETH) is witnessing a price breakout on the back of increasing institutional interest in the second-largest cryptocurrency by market capitalization. The increased bullish sentiment pushed Ether price up by 2% to an intraday high at $2,118, and ETH trading above $2,000 could be a sign that greater attention is shifting toward Ether. The renewed bullish momentum comes after last week’s blockbuster performance that saw ETH gain 10.4%.
Let’s review a few of the reasons for Ether’s newfound strength.
Institutional interest soars as the spot ETH ETF hype spreads
The institutional investor hype began on Nov. 1 when the U.S. Securities and Exchange Commission acknowledged Grayscale Investment’s application to convert its Ethereum trust into an exchange-traded fund (ETF).
The commission’s move was in response to a direct court order that mandates it to review Grayscale’s pending ETF applications. So far, it has not confirmed a spot crypto ETF, but the market has gained steam, as the SEC’s deadline for the first wave of approvals is Nov. 17.
However, the market flashed more bullish signals when BlackRock, the world’s largest asset manager, filed for a spot Ether ETF on Nov. 9. The confirmation sent Ether price over the $2,000 resistance, earning a six-month high on the same date.
Many anticipate that the SEC will first approve a spot Bitcoin ETF in early 2024. Once that happens, many crypto analysts see a spot Ether ETF approval shortly after.
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The anticipation of approval is leading to increased institutional capital inflows, with Bitcoin’s topping $1 billion in 2023.
At the same time, CME options open interest, a favorite of institutions, topped Binance for the first time on Nov. 10.
Ethereum network revenue and fees increase
The Ethereum decentralized finance (DeFi) ecosystem witnessed a boost in daily fees, growing 57.6% in seven days on Nov. 13, in tandem with Ether’s price growth. With the increase in fees, Ethereum network revenue is up 64% in the past seven days, resulting in $6.1 million in a single day on Nov. 12.
The Ethereum network’s growth has increased gas fees and turned the network deflationary again. Over the previous 30 days, Ethereum network emissions had been inflationary, but after the increase in fees and revenue, Ether turned deflationary, with its coin supply growth contracting by -0.45% in seven days.
Related: 3 theses that will drive Ethereum and Bitcoin in the next bull market
Bitcoin price action lifts Ethereum price and sentiment
Ether broke the key $2,000 level right as Bitcoin barrelled above $36,500. Despite profit taking from both coins, the increase in trading volume has helped maintain these levels.
A constructive week in terms of volumes for both Bitcoin and Ethereum.
Although to a lesser extent, we witnessed some profit-taking again.
The elevated skew favored call spreads and diagonals.— GravitySucks (@Gravity5ucks) November 12, 2023
With Ether price demonstrating an ability to maintain $2,000, some analysts believe the altcoin is positioned for further upside.
According to independent market analyst Michaël van de Poppe:
“Breaking above $2,150 marks the end of the bear market, as this level is comparable to the $30,000 barrier of Bitcoin.”
#Ethereum faces the final resistance.
Breaking above $2,150 marks the end of the bear market, as this level is comparable to the $30,000 barrier of #Bitcoin.
If it breaks, then we're likely seeing a run towards $3,100-3,600. pic.twitter.com/i91ULBRtLz
— Michaël van de Poppe (@CryptoMichNL) November 13, 2023
While the current market looks healthy, macro factors like further rate hikes and potential U.S. industry crackdown may weigh on Ether’s price slightly. Factors such as a Bitcoin or Ether ETF approval, positive regulatory clarity and an easing of interest rate hikes may prove to be catalysts for price growth. Ether’s price volatility is likely to continue.
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.
