Ether, the native coin of the most popular blockchain network, has been struggling at a $3000 resistance level last week.
This has generated speculations about the coin’s future as a close contender of Bitcoin.
But thanks to the activity of market makers and dealers and the Ether ETF effect, the cryptocurrency managed to move beyond the crucial price resistance.
Ethereum Strikes Back
By Saturday, the cryptocurrency had already tested its recent high three times before retreating below this psychologically important price.
The second-largest cryptocurrency by market capitalization reached a high of $3,036 before receding again.
However, the token breached the tough resistance on Sunday while Wall Street was asleep.
After a brief correction in the evening, the coin continued to soar and reached a one-year high of $3270.93 today.
How Hedging Pumped Ether Up
It is widely believed that Dealer hedging, a market dynamic that catalyzed Bitcoin’s upward momentum in late 2023, is now pushing ether’s price up.
Griffin Ardern, head of options trading and research at crypto financial platform BloFin, believes that this breakout was supported by the hedging activities of dealers from the ether options market.
As ether moved toward the resistance, the dealers bought ether in the spot/futures market to hedge the upside risks, he added. This has played out in favor of Ether, lifting it past the $3,250 mark.
The market dynamics of Bitcoin followed a similar pattern in November, pushing its price beyond the $36,000 level.
What The Fundamentals Speak
However, fundamental analysts think that recent gains of Eher are due to increased staking and burning which effectively reduces the supply of ETH.
Some believe that the newly announced Ethereum spot ETF has also played a part in the price pumping.
Dealer activity was a driving force for Bitcoin in the final quarter when Bitcoin ETFs were launched, fueling investor demand.
Ethereum’s upcoming Dencun upgrade should have turned some cards in the coin’s favor, some believe.
More Action Left For ETH
Crypto commentator Ryan Sean Adams notes that Ethereum hasn’t even hit its demand season yet, and when the spot Ether ETF hits the market, the prices will go through the roof, his X post says. As per the website ultrasound.
money, the data is clear that there is a drop of 18,960 ETH in the circulating supply over the past 30 days alone.
What’s the Way Ahead for ETH?
With the leading altcoin exceeding its price predictions, the next resistance level of ETH is expected at $3,500.
It is expected that the coin can keep up its upward momentum if it can prevent the prices from falling below the $2,700 support level.
Experts believe that the Bitcoin halving event due in April this year will have an impact on the whole crypto space and ETH will touch the anticipated $5000 mark by the end of 2024.
Conclusion
The global cryptocurrency market cap stands at a little over $2 trillion. That’s comparable to the entire GDP of India.
Bitcoin, the largest cryptocurrency, has experienced similar price dynamics at $50k and came out of it today, crossing $56k.
People who are in the loop think that both Bitcoin and Ether will break their all-time highs sometime near the end of this year.
Related News: BTC Hits $57K As Trading Volume Of Spot Bitcoin ETFs Surge
