Investor demand for leveraged Ether-based trading products is skyrocketing, showcasing increasing momentum that could take the world’s second-largest cryptocurrency above the $4,000 psychological mark.
Investors are increasingly looking to open leveraged Ether (ETH) positions that allow the temporary borrowing of funds to increase the size of a trader’s position.
Demand for leveraged the VolatilityShares 2x Ether exchange-traded fund (ETF) rose over 160% since Nov. 5, according to Vetle Lunde, head of research at K33 Research, who wrote in a Nov. 28 X post:
“Since November 5, the ETH equivalent exposure in the VolatilityShares 2x leveraged long ETH ETF has increased by 278,150 ETH (+160%!). VolatilityShares now hold more than half of CME’s ETH [open interest] (50.1%!!).”
VolatilityShares 2x Leveraged Long ETH ETF. Source: Vetle Lunde
The 160% rise in leverage demand occurred in the three weeks since United States President-elect Donald Trump won the 2024 presidential election held on Nov. 5, bolstering overall investor appetite for risk assets such as cryptocurrencies.
ETH&BTC, 1-year chart. Source: Cointelegraph
While Ether’s price has lagged behind Bitcoin (BTC), market participants expect this to change after the current ETH price slump. Based on emerging technical chart patterns, some analysts expect Ether to reach $20,000 at the top of the 2025 bull cycle.
ETF inflows and spot buying will fuel Ether’s rally to $4,000 — Analyst
While Ether ETF flows turned positive, Ether’s recent price gains may also be attributed to spot buying pressure.
This suggests that Ether is set for more upside momentum in the following weeks, Ryan Lee, chief analyst at Bitget Research, told Cointelegraph:
“The implied volatility of 1-day options has remained stable, indicating that the recent breakout above $3,600 was driven by spot accumulation rather than speculative activity. This trend suggests ETH may continue to rise, and the ETH/BTC exchange rate, which shows signs of bottoming and rebounding, is worth monitoring.”
This could set up Ether for a rally above the $4,000 psychological mark based on technical chart formations shared by popular trader Wolf in a Nov. 27 X post:
“One way to view it is as a 3-year cup and handle, with major resistance at 4k. Once that’s cleared, a measured move places it north of $15k.”
ETH/USD, cup-and-handle pattern. Source: Wolf
November’s record stablecoin inflows to exchanges could also contribute to Ether’s price rally, added Lee:
“Sustained net inflows of stablecoins are providing liquidity to the crypto market […] This inflow trend is unlikely to reverse in the short term, suggesting that the market’s momentum will persist.”
Bitcoin trading under $100,000 could be an Ether price catalyst
Bitcoin’s price rose to a new all-time high of $99,800 on Nov. 22 before staging a brief correction to above $91,000, which some analysts speculate could extend as deep as 30% before breaching the six-figure price.
However, Bitcoin remaining rangebound under $100,000 could be a positive catalyst for Ether price, wrote popular crypto analyst Rekt Capital in a Nov. 28 X post:
“Bitcoin ranging between $91,000 & $100,000 may very well be a recipe for Ethereum to take the lead and enable money flow into smaller Altcoins.”
ETH/USD, 1-week chart. Source: Rekt Capital
Continued Ether ETF inflows could also contribute to Ether’s price rally. The Ether ETFs logged their fourth consecutive day of net positive inflows worth over $90 million on Nov. 27, Farside Investors data shows.
Spot Ether ETF flows (US dollar, million). Source: Farside Investors
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