Key Points
Ethereum’s Performance and Market Activity
Ethereum is holding steady above $3,300 as we approach President-elect Donald Trump’s inauguration.
Derivatives traders are bullish on Ethereum.
Open interest in Ether’s derivatives contracts has exceeded $30 billion.
Large wallet investors of Ethereum continue to accumulate the token.
This is despite its underwhelming price performance in 2024.
Ethereum has a high correlation with Bitcoin.
Recent market movers are conducive to gains in Ether.
Increased Interest from Derivatives Traders
Data from Coinglass shows a significant increase in Ethereum derivatives trade volume.
This has gone up by almost 47% in the past 24 hours.
Open interest in derivatives is currently around $30 billion.
Options volume has exceeded $1 billion within a 24-hour timeframe.
The long/short ratio on Binance and OKX suggests that derivatives traders are bullish on Ethereum.
This is an indication of expected increase in Ethereum’s price.
Open interest in Ethereum has increased since the recent US Presidential election.
However, it is still below its peak of $31.99 billion, which was observed on January 7, 2025.
Ethereum’s On-Chain Analysis
The outlook of derivatives traders is seen as a measure of what can be expected in spot markets.
When combined with bullish on-chain metrics, it supports the thesis of gains in Ethereum’s price.
Data from Santiment indicates that the supply of Ether tokens held by large wallet investors has been steadily increasing.
This suggests that traders have continued to accumulate despite a decline in ETH price.
This is a positive sign for Ethereum.
The total funding rate aggregated by Ethereum has been mostly positive throughout January 2025.
This indicates optimism and hope for price gain among traders.
The number of Ethereum held by traders with 1,000 to 10,000 ETH in their wallets has increased in the past week.
Similarly, holders with 1 million to 10 million Ether have added to their ETH holdings between the last two weeks of 2024 and January 17, 2025.
Market Movers for Ethereum
Data from Farside Investors shows that institutional capital inflow to Ether nearly doubled on Thursday.
ETH Spot ETFs recorded $166.6 million in inflows on January 16, after 59.7 million the day before.
Rising institutional interest is generally bullish for Ether.
Another key market mover is the rising activity on the chain from Layer 2 protocols.
Data from GrowThePie indicates that Ethereum Layer 2 chains have seen rapid growth in active addresses.
This has increased by over 300% in a year and surpassed 10 million weekly.
Active wallets on multiple Layer 2s are relatively low, at less than 5%.
Rising Layer 2 adoption and utility contribute to revenue for the underlying chain.
This supports a thesis of growth for Ether.
Ethereum’s Price Forecast
The ETH/USDT weekly price chart shows Ether hovering around the $3,360 level early on Friday.
The altcoin is 22% below its 2024 peak of $4,107.
Two technical indicators, the Relative strength index and the moving average convergence divergence, support a bullish thesis for Ethereum.
If Ethereum ends its consolidation and breaks above the December 2024 peak, the altcoin could target the $4,578 level.
It could then rally towards its previous all-time high at $4,878.
Vitalik Buterin’s Views on Ethereum Layer 2
Vitalik Buterin recently commented on Sony Block Solution Labs’ Soneium.
He said that the project demonstrates how Ethereum Layer 2 is beneficial for businesses and users.
Buterin believes that the creation of a free market on the Layer 2 level makes it more accessible and useful for businesses and users.
This supports the growth of the Ethereum ecosystem.
The controversy surrounding Soneium was the steps taken to safeguard intellectual property by placing restrictions on some contracts within the protocol.
However, users could continue transactions on the Ethereum mainnet with a delay of a few hours.
