Ether (ETH) has experienced a 0.27% rally in the past 24 hours, reaching a trading level of $3,257. In the last seven days, Ether’s price has increased by 11%, following Bitcoin’s (BTC) 16.3% price surge over the same period.
The upward momentum of Ether can be attributed to Bitcoin’s climb to a more than two-year high of $57,000, as well as the anticipation surrounding the Dencun upgrade.
Bitcoin’s breach of the $57,000 mark on February 27th, for the first time since November 2021, has also boosted investor confidence in Ether, given the historical correlation in price between the two largest cryptocurrencies.
As a result of Ether’s rally, the Crypto Fear & Greed index has risen to a two-week high of 79, indicating extreme greed among investors. Last month, the index averaged 54, signaling neutrality. The Crypto Fear & Greed index serves as a multifactorial measure of sentiment in the crypto market.
Further strengthening investor confidence, spot Bitcoin exchange-traded funds in the United States reached an all-time high of $2.4 billion in daily trading volume on February 26th, according to Eric Balchunas, senior ETF analyst at Bloomberg.
The current pre-halving rally of Bitcoin is significantly impacting the flow of funds into Ether, which is expected to rotate into smaller altcoins in the coming weeks, as noted by pseudonymous crypto analyst Rekt Capital.
Ether futures open interest on Binance, the world’s largest cryptocurrency exchange, has reached a new all-time high of $3.88 billion on February 26th, surpassing the previous high of $3.31 billion set on November 3, 2021, when Ether was trading above $4,400.
The increased demand for leverage in Ether has contributed to a total Ether futures open interest of $10.54 billion, according to Coinglass data. Ethereum’s open interest hit an all-time high of over $11 billion in November 2021, shortly before Ether’s price dropped by 55% from its peak of $4,891.
Aside from Bitcoin’s rally, Ether’s price movement is also influenced by the anticipation surrounding the Dencun upgrade, scheduled for March 13th. The upgrade aims to reduce transaction costs and improve scalability on the Ethereum network by introducing the concept of proto-danksharding, which compresses transaction data in a more cost-effective manner.
According to a report by Grayscale Research, the Dencun upgrade is the primary reason for Ether’s positive price movement. However, this article does not provide investment advice or recommendations, and readers are advised to conduct their own research before making any decisions.