Why Is Ethereum Going Up? Technical and Fundamental Price Analysis
Ethereum (ETH), the second-largest cryptocurrency after Bitcoin, has experienced significant gains lately, even as other digital assetsretreat from the recent market rally. CoinaMarketCap's data shows that ETH is currently trading at $3,635, up 5% and 10% in the past day and week,respectively.
This trend, coinciding with Donald Trump's victory inthe US presidential election, has highlighted a growing appetite for riskassets and Ethereum's potential to break key resistance levels. Amid the rise, the market is watching the next important price level of $4,000 with the current bullish technical indicators and strongfundamentals.
Among the factors boosting ETH is leveraged ETFproducts, which have reportedly experienced a substantial rise in demand sinceearly November. The demand for VolatilityShares 2x Ether ETF rose 160% sinceNovember 5, Cointelegraph reported.
ETF Boom and US Election Aftermath
In the three weeks since the election, investorconfidence in risk assets like Ethereum has surged, fueled in part byexpectations of a more favorable regulatory environment. Although Bitcoin led the surge with new all-time highprices, Ethereum's price has been steadily climbing, positioning it as astrong-performing cryptocurrency in the coming months.
Ethereum Weekly Chart, Source: CoinMarketCap
Ethereum moved from a low of $3,260 on Tuesday to ahigh of $3,685 on Thursday, representing a 13% increase in just 2 days. ETH'sgains are more substantial on the monthly chart. The token has surged 37%, withtechnical indicators like the Relative Strength Index (RSI) and moving averagessuggesting strong bullish momentum.
This optimism is further fueled by the network'sdominant role in decentralized finance (DeFi), where it commands over half thetotal value locked across all platforms. Data from DefiLlama shows that Ether has nearly $70 billion in TLV, although slightly lower from 2021's more than $100 billion.
Ethereum Total Value Locked, Source: DefilLlama
Ethereum's fundamentals remain robust, with risingon-chain activity, new wallet creation, and increased revenue. Layer-2 scalingsolutions also attract developers and users, enhancing the network'sscalability and competitiveness.
Bitcoin Factor
Bitcoin's struggle to break past the $100,000 markcould inadvertently benefit Ethereum. Analysts speculate that Bitcoin'srange-bound trading may divert investor attention and funds toward Ethereum,pushing its price higher.
Additionally, Ethereum ETFs have had consistentinflows, with $90 million recently added, according toFarside Investors data. Ethereum remains the backbone of the DeFi ecosystem.Ethereum ETF Flows, Source: Farside Investors
Additionally, Lido, Aave, and EigenLayer collectively hold asignificant share of this value. Stablecoin activity on Ethereum has alsosurpassed Tron, with $60.3 billion in USDT now hosted on the Ethereum network,Coindesk reported.
The broader market sentiment around Ethereum has alsobenefited from Trump's pro-crypto campaign promises. His administration hassignaled a reduction in regulatory hurdles, sparking hopes of a DeFi resurgencein the U.S.