Ethereum’s (ETH) market indicators are presenting a rare confluence of bullish signals, suggesting the second-largest cryptocurrency by market capitalization may be poised for a significant price surge. There are three key data points that might become a foundation for a new rally.
Institutional pivot: ETH Futures gain traction
The first sign comes from the futures market, where ETH’s performance on the Chicago Mercantile Exchange (CME) is turning heads. Ethereum futures are now trading at a 5% premium compared to Bitcoin’s basis, a notable shift in institutional focus.
Interesting to see the futures basis for ETH on CME is now trading at a 5% premium to the basis for BTC and open interest for ETH on CME is now starting to pick up after lagging BTC.
Early signs of tradfi starting to rotate into the ETH ETF trade? pic.twitter.com/o12EXjWsmZ
— Will (@WClementeIII) December 4, 2023
Moreover, open interest in ETH on the CME has seen an uptick, starting to outpace BTC after a period of lagging. This shift could indicate growing interest from traditional finance (TradFi) investors in Ethereum, potentially as a reaction to the burgeoning ETF market for ETH.
Bullish technical outlook on ETH charts
The provided price chart offers a bullish technical outlook for Ethereum. A closer analysis reveals a strong uptrend, with ETH’s price action forming higher highs and higher lows – a classic indicator of bullish momentum. The moving averages have aligned in a way that typically precedes bullish conditions: the 50-day moving average is well above the 200-day moving average, and the price is currently trading above both, confirming a “golden cross” formation. This technical pattern often attracts further buying from momentum traders, reinforcing the positive trend.
DeFi as catalyst amid BTC’s potential correction
Lastly, the potential for a correction in Bitcoin’s (BTC) price may drive investors toward Ethereum, particularly as the decentralized finance (DeFi) sector gains more traction. Ethereum is the foundational platform for DeFi applications, and as this industry grows, ETH is likely to benefit from increased utility and demand. This, combined with a possible redistribution of capital from Bitcoin to Ethereum, could provide the necessary fuel for Ethereum’s price growth.
