Ethereum is holding steady above $3,300, as crypto traders prepare for the inauguration of President-elect Donald Trump. Derivatives traders are supportive of Ethereum, and open interest in Ether derivatives contracts exceeded $30 billion as of Friday.
Ethereum is Big wallet investors continue to accumulate the token despite its lackluster price performance in 2024. The altcoin has a high correlation with Bitcoin, and the recent market movements give support for gains in Ether.
Ethereum sees big bets from derivatives traders
Ethereum Derivatives data on Coinglass shows a nearly 47% increase in options trading volume in the past 24 hours, as interest derivatives are open around $30 billion. Options volume exceeded $1 billion in a 24-hour timeframe.
The long/short ratio, used to determine whether derivatives traders are bullish or bearish on a token, is greater than one on Binance and OKX. Derivatives traders are bullish on the rise in the price of Ethereum.
The chart below shows the increase in open interest in Ethereum since the most recent US presidential election. Open interest is below the all-time high of $31.99 billion, seen on January 7, 2025.
Ethereum on-chain analysis
The view of derivatives traders is considered to be a measure of what traders can expect in spot markets. When combined with on-chain bullish metrics, the outlook of derivatives traders supports a thesis of gains in the price of Ethereum.
Santiment data shows that Ether The supply of tokens held by large wallet investors has steadily increased, meaning that even as the price of ETH suffered a decline, traders continued to accumulate. This is a positive sign for Ethereum.
The total funding level accumulated by Ethereum is mostly positive through January 2025. This represents hope and optimism for price gains among traders.
Ethereum Traders increased by 1,000 to 10,000 ETH in their wallets in the past week. Similarly, holders with 1 million to 10 million Ether added to their ETH holdings between the last two weeks of 2024 and January 17, 2025.
Ethereum market conversions
Farside Investors data shows institutional capital inflows into Ether doubled on Thursday. ETH Spot ETFs recorded $166.6 million in inflows on January 16, after 59.7 million the previous day.
Usually, institutional interest is rising bullish for Ether.
Another key market trend is the rising on-chain activity from Layer 2 protocols. Data from GrowThePie shows that Ethereum Layer 2 chains have grown rapidly in active addresses, increasing by over 300% in year and exceeds 10 million every week. Active wallets on multiple Layer 2 are relatively low, at less than 5%.
The rising adoption and convenience of Tier 2 will increase revenue for the underlying chain, supporting the growth thesis for Ether.
Technical analysis and ETH price forecast
The weekly ETH/USDT price chart shows Ether hovering around the $3,360 level early Friday. The altcoin is 22% below its 2024 high of $4,107. Two technical indicators, the Relative Strength index and the moving average convergence divergence, support a bullish thesis for Ethereum.
RSI goes up and reads 53, MACD flashes continuous green histogram bars, supporting a bullish thesis for Ethereum on the weekly time frame.
If Ethereum completes the consolidation and breaks above the December 2024 peak, the altcoin could target the $4,578 level and rally towards the previous high of $4,878, as seen in the ETH/USDT weekly chart below.
Take Vitalik Buterin on Ethereum Layer 2 and the future of Ether
Buterin recently mentioned Soneium at Sony Block Solution Labs. Buterin said the project shows how Ethereum Layer 2 is “great for businesses and consumers” in a tweet on X.
Buterin believes that the creation of a free market on the Layer 2 level makes it more accessible and useful for businesses and consumers, supporting the growth of the Ethereum ecosystem. The idea is to consider Layer 2 rollups as initiatives built in cities within the “Ethereum mainnet” state.
The controversy over Soneium was the measures taken to protect intellectual property by placing restrictions on certain contracts within the protocol. Although it may seem that meme coin traders have been cut off, users could continue transactions on the Ethereum mainnet with a delay of a few hours.
Disclosure: This article does not constitute investment advice. The content and materials on this page are for educational purposes only.
