Ethereum price topped the $3,100 level on Feb. 20 for the first time since April 2022.
Ether climbed from a price of $2,985 on Feb. 25, surging more than 6.5% in the last 48 hours and 80% over the last half a year, to hit a 22-month high at $3,134.
Ether’s price performance is driven by the increasing optimism in the market of a possible approval of a spot Ether exchange-traded fund (ETF) by the United States Securities and Exchange Commission (SEC) and the implementation of Ethereum Improvement Proposal (EIP) 4844 through the Dencun upgrade.
According to data from Polymarket, there is a 45% chance that spot Ether ETF will be approved by May 31.
Ethereum approval chances. Source: Polymarket
Meanwhile, Bloomberg ETF analyst Eric Balchunas puts the chances of a spot Ethereum ETF approval at 70%, suggesting a positive outlook for Ether ETFs amid regulatory delays.
Bloomberg ETF analyst Eric Balchunas said he expects a 70% chance of an Ethereum spot ETF being approved in May. The SEC needs to make approval decisions on multiple Ethereum spot ETF applications by the end of May, including VanEck, Ark 21Shares and Hashdex. Digital asset lawyer…
— Wu Blockchain (@WuBlockchain) January 11, 2024
The last time Ether traded above $3,100 was 22 months ago, on April 21, 2022, when it reached a high of $3,178 before sinking into an extended bear market that took its price to $883 in June 2022.
ETH’s recent performance may also be connected to the network’s much-anticipated Dencun upgrade, which is expected to implement several EIPs, including EIP-4844, which introduces proto-danksharding. The upgrade simplifies the transaction process by storing some data off the blockchain, speeding up transactions and cutting costs. The upgrade is targeted for March 13.
Data from on-chain analytics firm Coinglass shows Ethereum’s open interest is nearing a 2021 all-time high. The ETH OI has increased from $4.9 billion in July 2023 to $11.40 on Feb. 26.
#Bitcoin #ETH open interest near 2021 all-time high.
👉https://t.co/b1RbJ1A35P pic.twitter.com/SVigeI5Xnp
— CoinGlass (@coinglass_com) February 26, 2024
This significant increase in open interest is observed on the chart just after the approval of a spot Bitcoin ETF and the potential approval of a spot Ethereum ETF.
This record surge in the open interest of Ethereum was observed just after the recent breakout of the consolidation zone, which had been a strong hurdle for Ethereum
Ethereum breaks out of a range
From Feb. 20, to Feb. 24, 2024, the ETH price was moving in a narrow range between $2,000 to $3,030. However, on Feb. 25, Ether broke out of this consolidation zone, leading to the observed massive open interest.
The price is still confined in an ascending parallel channel, and the position of the Relative Strength Index (RSI) in the overbought region suggested that the buyers still had the upper hand. The price strength at 76 suggested that there was still room for the upside.
As such, Ether could continue the uptrend rising above the $3,200 mark, making a 4.5% climb toward the upper boundary of the prevailing chart at $3,247.
A decisive close above this level would confirm a bullish breakout for the largest altcoin by market capitalization toward all-time highs of $4,000.
ETH/USD daily chart. Source: TradingView
On the downside, the RSI shows that Ether is overbought. As such, if sellers give in to their appetites, ETH could drop from the current levels toward the lower boundary of the rising channel at $2,975. A drop below this level would signal the start of a downtrend, with the major support level at $2,800 providing a breathing zone for ETH.