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Ethereum (ETH), the second-largest cryptocurrency after Bitcoin, has experienced significant gains lately, even as other digital assets
retreat from the recent market rally. CoinaMarketCap’s data shows that ETH is currently trading at $3,635, up 5% and 10% in the past day and week,
respectively.
This trend, coinciding with Donald Trump’s victory in
the US presidential election, has highlighted a growing appetite for risk
assets and Ethereum’s potential to break key resistance levels. Amid the rise, the market is watching the next important price level of $4,000 with the current bullish technical indicators and strong
fundamentals.
Among the factors boosting ETH is leveraged ETF
products, which have reportedly experienced a substantial rise in demand since
early November. The demand for VolatilityShares 2x Ether ETF rose 160% since
November 5, Cointelegraph reported.
ETF Boom and US Election Aftermath
In the three weeks since the election, investor
confidence in risk assets like Ethereum has surged, fueled in part by
expectations of a more favorable regulatory environment. Although Bitcoin led the surge with new all-time high
prices, Ethereum’s price has been steadily climbing, positioning it as a
strong-performing cryptocurrency in the coming months.
Ethereum moved from a low of $3,260 on Tuesday to a
high of $3,685 on Thursday, representing a 13% increase in just 2 days. ETH’s
gains are more substantial on the monthly chart. The token has surged 37%, with
technical indicators like the Relative Strength Index (RSI) and moving averages
suggesting strong bullish momentum.
This optimism is further fueled by the network’s
dominant role in decentralized finance (DeFi), where it commands over half the
total value locked across all platforms. Data from DefiLlama shows that Ether has nearly $70 billion in TLV, although slightly lower from 2021’s more than $100 billion.
Ethereum’s fundamentals remain robust, with rising
on-chain activity, new wallet creation, and increased revenue. Layer-2 scaling
solutions also attract developers and users, enhancing the network’s
scalability and competitiveness.
Bitcoin Factor
Bitcoin’s struggle to break past the $100,000 mark
could inadvertently benefit Ethereum. Analysts speculate that Bitcoin’s
range-bound trading may divert investor attention and funds toward Ethereum,
pushing its price higher.
Additionally, Ethereum ETFs have had consistent
inflows, with $90 million recently added, according to
Farside Investors data. Ethereum remains the backbone of the DeFi ecosystem.
Additionally, Lido, Aave, and EigenLayer collectively hold a
significant share of this value. Stablecoin activity on Ethereum has also
surpassed Tron, with $60.3 billion in USDT now hosted on the Ethereum network,
Coindesk reported.
The broader market sentiment around Ethereum has also
benefited from Trump’s pro-crypto campaign promises. His administration has
signaled a reduction in regulatory hurdles, sparking hopes of a DeFi resurgence
in the U.S.
This article was written by Jared Kirui at www.financemagnates.com.
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