Ethereum
3 Reasons Why Ethereum Price Looks Ready to Rise — TradingView News
Growing expectations for approval of Ethereum spot ETFs in the United States have sent the price of Ether (ETH) up more than 26% over the past two days to trade at highs not seen since on March 15.Cointelegraph
Since hitting $3,800, ETH price has pulled back slightly, but the possibility of an Ethereum ETF spot approval, along with fundamental factors and on-chain metrics suggest the uptrend of altcoins remains intact.
Rising Open Interest Supports Ether’s Uptrend
One of the factors supporting Ether’s rise is the increase in open long positions of ETH in the futures market. Data from on-chain market intelligence firm CryptoQuant shows that Ethereum’s total open interest in the derivatives market increased from 2.8 million to 3.2 million ETH in a matter of hours on May 20 after rumors emerged that the United States Securities and Exchange Commission (SEC) was making a U.S.-enabled approval of Ethereum spot ETFs. This is the highest open interest since January 2023.
CryptoQuant analysts noted:
“Perpetual futures market traders have aggressively opened long positions in Ethereum, expecting higher prices after rumors that the US Ethereum spot ETF could be approved in May.”
In US dollar terms, ETH open interest has now reached an all-time high of $14.68 billion. High open interest simply indicates that the underlying trend is strong and investor confidence in Ethereum can be sustained.
Traders now prefer Ether to Bitcoin
The potential approval of an Ethereum spot ETF this week has sparked discussion among analysts about the possible implications for the Ethereum price.
According to CryptoQuant analysts, there are now more orders to buy ETH in the perpetual futures market than in other order types. The chart below shows that the taker-to-call ratio is greater than one, indicating that buy orders in the perpetual futures market are now larger than sell orders.
“This puts upward pressure on prices.”
Additional data from CryptoQuant also revealed that traders now prefer to have greater exposure to Ethereum compared to Bitcoin. This is illustrated by the Ethereum-Bitcoin open interest ratio (purple line in the chart below), which increased from 0.54 to 0.67 on May 20. This means that Ether’s total open interest is 67% of Bitcoin’s.
“A higher ratio implies that traders prefer to have greater exposure to ETH than to Bitcoin at margin, and vice versa.”
Similarly, TradingView data reveals that the ETH/BTC trading pair rose from a low of $0.04572 on May 20, rising 19.6% to a two-month high of $0.06471 on May 21. This suggests the strengthening of the price of Ether against BTC. 
The strength of the ETH/BTC uptrend is reinforced by the Relative Strength Index position at 68, suggesting that Ethereum’s uptrend is intact.
Related: Ethereum ETF confirmed? VanEck spot Ether ETF listed by DTCC
Demand for ETH is increasing
Data from CryptoQuant reveals that increased demand for ETH appears to have picked up amid increased buying by permanent holders following rumors of ETF approval. The chart below shows the increase in ETH purchases by permanent holders on May 20, based on expectations of spot ETF approvals.
CryptoQuant defines permanent holders as “addresses that accumulate ETH and never sell.”
“This type of holders purchased over 100,000 ETH, the highest daily level since September 2023.”
Popular analyst Ali Martinez made similar observations, sharing the following chart from Santiment showing increased accumulation of ETH whales on May 20.
Market intelligence firm Santiment noted that while crowd sentiment towards Bitcoin and Solana remains bearish, hype around Ethereum has reached its highest level since September 2023.
“#Ethereum is seeing the most #bullish crowd sentiment since September, with the #SEC likely to approve first #ETFs and $ETH price surging.”
According to data from Alternative.me, the Crypto Fear and Greed Index reached the “extreme greed” zone at 76, up from “greed” at 64 last week. This means that retail investors are increasingly positive about cryptocurrencies, and if the SEC approves Ethereum spot EFTs this month, the price of ETH is expected to continue its uptrend.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.