Ether (ETH), the world’s second-largest cryptocurrency by market capitalization, is currently on a weekly rally of 11%, considered to be its largest gain in Q3 2024. The cryptocurrency displayed four back-to-back daily green candles on the chart for the first time in two months.
So, what has been driving this price surge for ETH?
US Federal Reserve Cuts Interest Rates By 50 Basis Points
The crypto rally began on September 18 after the US Federal Reserve announced an interest rate cut on the dollar by 50 basis points (BP), setting a new target range for the federal funds rate at 4.75% to 5%.
The development signaled the beginning of a rate-easing cycle by global central banks. It also saw the crypto market make a rebound, with Ether surging nearly 14% and cat-themed meme coins emerging as the top performers of the week with a 40% increase in value, highlighting a resurgence of investor risk appetite. Despite posting gains of over 5%, Bitcoin (BTC) saw its market dominance drop below 58%, signifying a broad-based rally across the market.
Ether Open Interest Rises More Than $1 Billion In One Week
The Federal Open Market Committee’s (FOMC) decision and the subsequent rally saw Ethereum’s open interest (OI) increase by more than $1 billion in less than a week. On August 5, the OI stood at $11 billion when ETH was trading at $2,111. At the time of writing, ETH is changing hands at $2,639 – up 2.48% over the past 24 hours, and its OI is at $11.74 billion.
A rise in open interest indicates that futures traders are coming back to Ethereum and are looking to capitalize on the potential for more gains. The derivatives market also played a key role in the asset’s latest rally, with funding rates rapidly increasing over the past four days, which hints at longer bets.
Total Value Locked (TVL) On Ethereum Rises By $48 Billion In Two Days
The decentralized finance (DeFi) activity on Ethereum took a major hit in Q3 2024, falling from a high of $60.5 billion in June to $42 billion last month. However, the total value locked on Ethereum exhibited a strong recovery over the past 2 days as investors returned to the network. Ethereum’s TVL rose by almost $4 billion to stand at $48.33 billion.
Ethereum ETFs See Inflows
The resurgence of the cryptocurrency market was further supported by inflows into both Bitcoin and Ethereum exchange-traded funds (ETFs). Between September 19 and 20, the spot Ethereum ETFs recorded $8.1 million in inflows, while Bitcoin ETFs saw an inflow of $250.3 million.
ETH Is Aiming For The $2,800 Price Target
Crypto analyst “Kingpin Crypto” suggests that Ether’s long-term market structure looks promising from a technical perspective. While the asset’s year-to-date returns experienced flatness for a brief period in 2024, it is currently testing a strong area of demand, said the analyst.
He believes that if the price of the cryptocurrency can get back above $2,750, then it is an “absolute no-brainer” to go all in on ETH. Over the past day, Ethereum’s price breached a descending resistance trendline on the chart, closing at a position above $2,464, which indicated a bullish shift in trend.
Ethereum has managed to breach a lower-high trend, meaning the market is preparing for a bull run. ETH has also broken above its 200-day Exponential Moving Average (EMA), indicating that its average price has risen and an upside trend is brewing in the background.
The immediate price target for ETH is now $2,800. However, any potential pullback might take the cryptocurrency to the fair value gap of $2,400.
Read More: Rekt Capital Analysts Predict A Price Breakout For Bitcoin In The Coming Days
