Ethereum Rises Amid Growing Investor Confidence and Increased 'Whale' Activity
Summary:
Ethereum's cryptocurrency, Ether, has experienced a price rise similar to other cryptocurrencies due to growing investor confidence in the possible U.S. approval of a spot Bitcoin ETF. In addition, the SEC's acceptance of Grayscale's request to convert its Ethereum trust into an ETF, along with the increase in significant ("whale") transactions, has underpinned this rally. The liquidation of large short sales has also contributed to Ether's price rise.
Ethereum's cryptocurrency, Ether (ETH), has experienced an uptick, paralleling similar increases across the cryptocurrency sector as investor confidence grows surrounding the possible approval of a spot Bitcoin ETF in the United States. On October 25th, Ether's value steadied around $1,800, a key resistance point, following an almost 9% increase this week. The rise of the cryptocurrency coincided with an increase in daily trading volumes, signalling a surge in buyer interest in Ether.
Looking at the factors that have pushed Ether's price higher in recent days:
Grayscale's Ethereum ETF Victory: The U.S. Securities and Exchange Commission (SEC) on October 24th formally acknowledged a proposal from Grayscale Investments to turn its Ethereum trust into an ETF. The SEC's action adheres to a court order enforcing it to evaluate Grayscale's outstanding ETF requests. The SEC has yet to approve a spot cryptocurrency ETF, though it has given the green light to similar investment tools tied to Bitcoin and Ethereum futures.
The expectation is that the SEC will green-light a Bitcoin spot ETF in early 2024. Following this, the approval of a spot Ethereum ETF is a foregone conclusion in the eyes of many cryptocurrency analysts.
Surge in Ethereum Whale Transactions: The growing interest in ETFs is happening alongside a surge in "whale" activity in the Ethereum market. Notably, the number of Ether transactions surpassing $100,000 has climbed 15% week-on-week to reach its highest level since June, according to Santiment data. Bitcoin, Cardano and DAI have all seen comparable increases in "whale" transactions.
Prices of Ether have climbed in line with this "whale" accumulation, suggesting major investors are supporting the Ethereum rally. Furthermore, the withdrawal of Ethereum by whales from exchanges indicates a lowered likelihood of these investors trading their Ethereum holdings for other assets in the future.
Liquidation of Short Sales Boosts ETH to $1,800: The recent upswing in Ethereum's price has correlated with the liquidation of more than $70 million worth of short sales involving Ether futures contracts. By contrast, in the same period, roughly $41 million worth of long positions were liquidated.
All in all, the optimism among Ethereum bulls is rising as new investment opportunities through traditional stock market brokers are becoming evident.
**Note: This article does not contain investment advice or recommendations. Every investment or trading move comes with risk, and individuals should perform their own research before making a decision.
Published At
10/25/2023 4:04:00 PM
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