Ethereum prices have risen 18% in six days amid growing speculation that the U.S. Securities and Exchange Commission will approve a spot Ethereum exchange-traded fund (ETF), with some traders predicting a $5,000 level by the end of June.

What’s the opposite of the famous market phrase “don’t catch a falling knife”? That’s exactly what’s happening in the Ethereum market, with the price posting its strongest upward momentum in three years.

A week ago, before speculation on a spot Ethereum ETF heated up, the price of Ethereum ETH may have rebounded from a key bullish trend line support. Since then, Ethereum has surged by at least 18% to $3,800, a larger-than-expected increase.

What's more, the second-largest cryptocurrency's momentum indicator, which measures the rate of change in price over a 10-day period, has jumped to $880, its highest level since May 2021, according to data from charting platform TradingView. In other words, the bullish trend is strong; if there are bears looking to sell, it can be easily defeated. This also means that picking a top now is as dangerous as trying to pick a bottom (catching the falling knife when the asset falls sharply).

Traders use momentum indicators to confirm market trends and spot divergences. A bearish divergence occurs when this indicator decouples from rising prices, suggesting bullish exhaustion and a potential correction or decline.

Ethereum’s daily price chart is also showing momentum indicators rising with price, confirming an uptrend. The 14-day relative strength index RSI has crossed above 70, also a sign of strengthening bullish momentum. The indicator fluctuates between 0 and 100. Readings above 70 indicate strong upward momentum, rather than the widely believed overbought conditions. Readings below 30 indicate an acceleration in price sell-offs.

Immediate resistance is at $4,090, which was the high in April, followed by a record high of $4,692 during the 2021 bull run. Options traders from decentralized marketplace Lyra expect a rally to $5,000 by the end of the second quarter.