Ethereum Surges Past $3,200 Amid Historic ETF Approval and Trump Accumulation

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MARKETS TREND

Rising almost 5% in the previous trading session, Ethereum (ETH) has broken above the $3,200 milestone amid increasing institutional interest and regulatory approvals in a major change for the cryptocurrency market.

Ethereum Surges Past $3,200 Amid Historic ETF Approval and Trump Accumulation

Driven by the SEC’s recent approval of Bitwise’s Bitcoin and Ethereum ETF as well as notable accumulation by former President Donald Trump’s investment firm, the second-largest cryptocurrency by market capitalization is displaying great momentum.

Bitwise’s Bitcoin and Ethereum ETF Approval Marks a New Era

For the crypto market, Bitwise’s rapid certification by the U.S. Securities and Exchange Commission signals a historic turning point. With an 83% Bitcoin and 17% Ethereum split, the recently approved fund will deploy assets according on market size, therefore providing investors controlled access to both top cryptocurrencies in a single investment vehicle.

Trump’s World Liberty Financial Continues Strategic Accumulation

With about $204 million worth of ETH, Trump’s Strategic Accumulation World Liberty Financial (WLFI), connected with Donald Trump, has become a big participant in the Ethereum market. ETH’s price action has been much supported by the company’s aggressive buying approach, which includes daily acquisitions of steady $10 million and purchases on inauguration day alone totaling $47 million.

ETH/USD Technical Analysis

ETH/USD

 

Multiple analysts have identified bullish patterns in Ethereum’s ETH/USD current market structure. A key resistance level has formed at $3,344, which analysts describe as the “flip-to-pump” zone. Breaking this level could pave the way for a rally toward $4,000, with some experts projecting targets as high as $4,500 by February.

Technical indicators supporting the bullish case include:

  • Formation of a bullish pennant pattern
  • Higher lows on longer timeframes
  • A 37% increase in active addresses to 670,000
  • A bullish divergence on daily charts

However, cautionary signals have emerged from derivatives data. The Market Value to Realized Value (MVRV) ratio has dropped below its 160-day moving average, a pattern that historically preceded significant corrections. The last such occurrence led to a 40% price decline.

Ethereum Open Interest Analysis

Current market data reveals increasing open interest in Ethereum derivatives, indicating fresh position building. However, funding rates suggest a significant number of traders are maintaining short positions, creating potential for a short squeeze if prices continue to rise.

A notable liquidity gap exists between $2,900 and $3,100, which could act as a price magnet in the event of a pullback. Should ETH dip into this range, it might trigger a cascade of short liquidations, potentially fueling a rapid upward price reversal.

Ethereum Price Forecast

Although Ethereum is now trading 33% behind its all-time high, combined institutional adoption through ETF approvals, notable accumulation by well-known investors, and increasing network metrics point to solid basic support for ongoing price increase.

However, traders should remain mindful of the MVRV indicator’s warning signal and the potential for short-term volatility. The critical $3,344 resistance level will likely determine the immediate price direction, with a breakthrough potentially accelerating the move toward $4,000-$4,500, while failure could trigger a retreat to the $2,810-$2,980 support zone.

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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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