Ethereum (ETH) Aims for $4K Amidst Bullish Momentum

1. Ethereum (ETH) surges to $3,822, eyeing $4K amidst a resilient market.
2. Decreased ETH supply on exchanges as large holders accumulate, signaling long-term confidence.
3. Growing Ethereum staking and soaring futures open interest contribute to bullish momentum.

Despite a recent sell-off in Bitcoin, Ethereum (ETH) has exhibited remarkable strength, surging to a new year-to-date high of $3,822 on March 5.

This represents an 8% increase in the last 24 hours. This marks a 15% rise over the past seven days and an impressive 132% surge in the last six months. The cryptocurrency is now eyeing the $4,000 level, backed by several compelling factors.

Reduced Supply on Exchanges

One key driver supporting Ethereum’s upward trajectory is the diminishing supply on exchanges. Data from Glassnode reveals that ETH balances on exchanges have hit a 20-month low of 13.14 million ETH. It is experiencing a 7.7% decline over the past 90 days.

The decreasing exchange balances signify a trend of investors withdrawing their tokens into self-custody wallets. In fact, it is indicating a reluctance to sell and anticipation of future price increases. Large holders, with wallets containing $100,000 or more worth of ETH, have been accumulating, reaching 141,406 on March 4.

Growing Ethereum Staking

Dune Analytics data reveals that stakeholders currently have staked over $31.58 million ETH. Therefore, it is amounting to $119.8 billion and constituting 26.3% of the total ETH supply.

This reduction in circulating supply is further fueled by liquid staking solutions like Lido, Rocket Pool, and EtherFi, facilitating the staking of amounts less than 32 ETH and the use of staked assets as collateral in decentralized finance (DeFi).

EtherFi’s total value locked has surpassed $2 billion, highlighting the rising popularity of Ethereum liquidity protocols.

Soaring ETH Futures Open Interest

Increased demand for leverage has led to a surge in ETH futures open interest. This is undoubtedly reaching approximately $11.98 billion and inching closer to the previous peak of $13 billion witnessed on Nov. 9, 2021.

Coinglass data indicates a rapid increase in open interest by nearly 50% in less than two weeks, suggesting a heightened demand for leveraged ETH positions. Ethereum’s on-chain and derivatives markets currently reflect investor optimism. Thus, expectations for a spot Ether ETF approval and bullish tailwinds from the upcoming Dencun upgrade.

In summary, Ethereum’s climb to the $4,000 level is fueled by a combination of factors: reduced supply on exchanges, increasing staking activity, and a surge in futures open interest. These elements collectively indicate a strong bullish sentiment in the market.