Key takeaways:
Activity on the Ethereum network increased by 63% in the last 30 days, reinforcing the likelihood of a breakout to $5,000.
Open interest in Ether futures soared to $69 billion, indicating strong demand for leveraged investments.
Ether (ETH) reached its highest value in almost four years on Friday, triggering $351 million in liquidations from bearish leveraged positions. This increase followed investor expectations for a more lenient monetary policy in the U.S., influenced by comments from Federal Reserve Chair Jerome Powell. Could this momentum finally break ETH past the $5,000 mark?
Nasdaq rally indicates revived interest in ETH and risk assets
The Nasdaq Index rose by 1.8%, suggesting a shift from risk aversion as investors move away from fixed-income assets. Ether has seen a 33% increase over the past month, with three indicators pointing to further upward momentum, potentially solidifying the current bull market. With ETH currently trading above $4,800, a breakout to new all-time highs may be imminent.
Powell’s statements at the Jackson Hole Economic Symposium heightened expectations for multiple rate cuts: “The baseline outlook and the shifting balance of risks may warrant changing our policy approach.” According to the CME FedWatch tool, the bond markets now reflect a 45% chance of rates dropping to 3.5% or lower by March 2026, an increase from 37% the previous week. Lower borrowing rates alleviate financial burdens on companies, significantly lowering systemic risks.
Ether is gaining traction from rising onchain activity as well. The number of transactions on the Ethereum network surged 63% in the last 30 days, while active addresses increased by 26%. In comparison, Solana saw just a 2% rise in transactions, with active addresses declining by 14%, based on Nansen data. Meanwhile, BNB Chain reported a significant 50% drop in transaction counts.
Networks ranked by active addresses. Source: Nansen
While onchain metrics indicate rising activity, futures markets show more caution. Typically, ETH futures contracts trade at an annualized premium of 5% to 10% over spot prices to account for settlement delays. Currently, the monthly futures premium is at 7%, up from a bearish 4% earlier this week.
ETH 30-day futures annualized premium. Source: laevitas.ch
This hesitation also arises from comparisons with competitors. Both BNB (BNB) and Tron (TRX) are trading significantly above their November 2021 all-time highs, while ETH still lags below its peak of $4,868. This disparity explains why some traders remain cautious, despite strong network fundamentals.
Related: BlackRock leads $287M spot Ether ETF inflows after 4-day outflow streak
Strong ETH futures metrics bolster the rally
According to X user JA_Maartun, futures buyers have not displayed this level of aggressiveness in over a month. Analytics firm CryptoQuant monitors these dynamics by analyzing the volume of filled buy orders against sellers’ pending offers, which indicates growing conviction.
Source: X/JA_Maartun
Despite recent liquidations of bearish positions, the aggregate open interest on Ether futures remains strong at 14.4 million ETH, unchanged from the previous week. In dollar terms, leveraged ETH bets total an impressive $69 billion, indicating consistent demand for exposure.
This blend of heightened futures premiums, steadfast open interest, and increasing onchain activity reinforces the case for a breakout, suggesting that the $5,000 mark could be achieved sooner than many traders anticipate.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
