Ethereum Price Forecast: ETH eyes $3,366 as open interest growth could fuel quest for new all-time high
Ethereum price today: $2,860
- Ethereum exchange open interest sees 20% growth amid a six-week high in ETH ETF inflows.
- Despite the market-wide bullish sentiment, the Ethereum exchange reserve increase could cause a price correction.
- ETH could rally to $3,366 after reclaiming the $2,817 key support level.
Ethereum (ETH) is up nearly 8% on Thursday and could reach a new all-time high before year-end following increasing investor demand for the top altcoin. This is visible in ETH's open interest growth and increasing Ethereum exchange-traded funds (ETF) inflows.
Ethereum investors' bullish sentiment could fuel all-time high quest
Ethereum futures open interest (OI) has surged nearly 20% from $13.05 billion to $16.18 billion in the past two days, per Coinglass data. Open interest is the total number of outstanding contracts in a derivatives market. When OI increases alongside prices, it indicates new money is coming into the market to support an uptrend.
ETH Exchange Futures Open Interest | Coinglass
If ETH's OI continues rising, it could lead to a massive price surge, boosting the altcoin's prospect of reaching a new all-time high before the end of the year.
Beyond the traditional crypto market, institutional investors are also shelling out cash to buy into ETH, as Ethereum ETFs recorded net inflows of $52.30 million — the highest single-day inflow in six weeks.
A potential reason for the bullish sentiment surrounding ETH could partly be investors' expectations of Trump helping to provide a clear regulatory landscape for decentralized finance (DeFi) to thrive.
However, investors need to be cautious of a potential downturn, considering ETH's exchange reserve has increased by nearly 280,000 ETH, worth an average of $720 million, in the past three days. An asset's exchange reserve increase indicates the potential for higher selling pressure.
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ETH Exchange Reserve | CryptoQuant
Ethereum Price Forecast: ETH eyes $3,366 after reclaiming key support level
Ethereum has seen $60.45 million in futures liquidations in the past 24 hours following its 8% rise. Long and short liquidations accounted for $17.42 million and $43.04 million, respectively.
ETH shot above the convergence of the 50-day and 200-day Simple Moving Average (SMA) and reclaimed the $2,817 key support level — which held for four months — for the first time since August 5.
ETH/USDT daily chart
If ETH maintains an extended move above $2,817 and crosses the 100-day SMA, it could rally above the $3,000 psychological level to test the $3,266 resistance. A successful move above $3,266 could see ETH tackle its yearly high resistance of $4,093 to set a new all-time high.
The Relative Strength Index (RSI) and Awesome Oscillator (AO) are both above neutral levels, indicating prevailing bullish momentum.
A daily candlestick close below the 50-day and 200-day SMAs will invalidate the thesis and send ETH toward $2,258.
Ethereum FAQs
Ethereum is a decentralized open-source blockchain with smart contracts functionality. Its native currency Ether (ETH), is the second-largest cryptocurrency and number one altcoin by market capitalization. The Ethereum network is tailored for building crypto solutions like decentralized finance (DeFi), GameFi, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), etc.
Ethereum is a public decentralized blockchain technology, where developers can build and deploy applications that function without the need for a central authority. To make this easier, the network leverages the Solidity programming language and Ethereum virtual machine which helps developers create and launch applications with smart contract functionality.
Smart contracts are publicly verifiable codes that automates agreements between two or more parties. Basically, these codes self-execute encoded actions when predetermined conditions are met.
Staking is a process of earning yield on your idle crypto assets by locking them in a crypto protocol for a specified duration as a means of contributing to its security. Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus mechanism on September 15, 2022, in an event christened “The Merge.” The Merge was a key part of Ethereum's roadmap to achieve high-level scalability, decentralization and security while remaining sustainable. Unlike PoW, which requires the use of expensive hardware, PoS reduces the barrier of entry for validators by leveraging the use of crypto tokens as the core foundation of its consensus process.
Gas is the unit for measuring transaction fees that users pay for conducting transactions on Ethereum. During periods of network congestion, gas can be extremely high, causing validators to prioritize transactions based on their fees.
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