• Ethereum is up 62% over the past year.

  • That is nothing compared to Bitcoin and Solana.

  • Analysts say its fortunes will change for three reasons.

“Ethereum is on a tear.”

That’s according to Lukman Otunuga, senior market analyst at trading platform that several factors have catapulted the leading altcoin past the $3,500 mark for the first time since July.

It’s about time. While the cryptocurrency is up 60% over the past year, that’s low compared to Bitcoin’s 144% and archnemesis Solana’s almost 300%.

However, analysts are growing bullish that Ethereum is about to break out of its funk.

UK bank Standard Chartered predicts that the world’s second biggest digital currency will smash through its $4,878 record and hit $10,000 over the next year.

Ethereum bulls are equally bullish on options markets, with open interest — a measure of market bullishness — being nearly three times as high as bets that the price will fall.

The highest volume is at $4,000, with bullish bets worth $20 million outstripping bearish ones worth almost $6 million — suggesting that traders expect a rally soon.

“There are three reasons why ETH’s disappointing performance this cycle might be nearing its end,” Peter Chung and Min Jung, analysts at Presto Labs, wrote in a research note on Tuesday.

Donald Trump

Donald Trump is behind the recent crypto pump. He made several pro-industry promises on the campaign trail.

To market watchers, the combination of his victory in the US election and Republicans snatching majorities in the Congress and Senate sets the stage for a smattering of pro-crypto policies.

“If he can move ahead with his plans in 2025, the crypto market, which has already gained $1 trillion since Trump’s election victory, may see further gains,” Otunuga said.

For Standard Chartered, Trump’s victory is the primary catalyst that will propel Ethereum to $10,000 in 2025.

Institutional investment

Wall Street looks ready to embrace Ethereum.

For example, exchange-traded funds provider Bitwise is in talks with multi-million wealth management funds, its head of research Ryan Rasmussen said last week.

That growing interest could mark a turning point for Ethereum ETFs, which have so far failed to live up to their pre-launch hype.

“It’s definitely underperformed market expectations,” Kraken’s head of strategy, Thomas Perfumo, told DL News earlier in November.

The problem, he and others said, was that Ethereum lacked Bitcoin’s digital gold narrative.

Investors had to get their head around things like Ethereum’s layer 2s, decentralised applications and identity systems, Perfumo said.

He is, however, bullish that more investors will tap into Ethereum ETFs as the crypto rally thunders on and traders start to look to diversify their crypto investments.

“What we’ve seen in historic market cycles outside of the ETFs is that [when] Bitcoin does really well, it kind of lifts all boats,” Perfumo said.

ETH-BTC ratio

Chung and Jung also point at the ETH-BTC ratio.

The term refers to how much one Ether is worth in Bitcoin and is a metric for the comparative strength between one cryptocurrency against the other.

It has fallen over the past two years, but now Chung and Jung see signs of it “bottoming out, especially after a sudden surge in trading activity over the weekend.”

It is up just over 1% over the past week, suggesting that Ethereum’s headwinds are easing out.

What about 2024?

Chung and Jung’s comments come as Ethereum developers are looking to supercharge the blockchain’s performance to better compete against Solana.

To be sure, not everyone is convinced that Ethereum will break records soon. A $7 million bet on prediction site Polymarket only gives a 21% chance that the altcoin will hit a record in 2024.

Crypto market movers

  • Bitcoin is down 5.6% over the past 24 hours to trade at $92,552.

  • Ethereum is down 4.3% to trade at $3,334.


#ETHPriceSurge