Ethereum is experiencing a pivotal moment in its bullish trajectory, reaching new heights after breaking above its 2021 peak of $4,860. This movement follows a notable 14% increase on Friday, one of the strongest single-day performances this year, as market bulls regained dominance.
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The rally was triggered by comments from Federal Reserve Chair Jerome Powell during the Jackson Hole symposium. Powell suggested a potential easing of US monetary policy, indicating that current restrictive measures might no longer be suitable due to shifting risks. The market reacted swiftly: within minutes, both equities and cryptocurrencies surged, with Ethereum at the forefront of the altcoin movement.
Simultaneously, data from the derivatives market highlights the strength of this surge. Open Interest (OI) saw a significant jump as traders entered leveraged positions, demonstrating a renewed speculative interest. This sudden liquidity influx spurred Ethereum’s rally, propelling it beyond multi-year resistance thresholds.
Now in uncharted territory, analysts believe the momentum may continue as long as OI growth does not lead to excessive leverage. The upcoming weeks will be crucial in determining whether this breakout endures or leads to further volatility.
Ethereum Derivatives Signal Historic Momentum
Ethereum’s ascent into new highs is further reinforced by remarkable activity in the derivatives sector. According to analyst Maartunn, over $3.18 billion in new positions have been added to Ethereum derivatives in just 24 hours, resulting in a nearly 10% rise in Open Interest (OI). He characterized this as “insane stuff,” underscoring the rapidity and scale at which traders are positioning for the next move.
This OI increase signals aggressive speculation, with investors wagering on Ethereum’s continued momentum after surpassing its 2021 all-time high. Although higher OI can support rallies by providing liquidity, it may also lead to volatility if leveraged positions unwind. Nevertheless, the inflow magnitude indicates growing confidence in ETH’s potential upside.
Additionally, Ethereum’s hourly Taker Buy Volume has reached a multi-month high of $5.76 billion. This metric, which captures aggressive market buy orders, reflects immediate demand rather than mere speculation. Such robust buy-side activity often coincides with breakout periods when bulls dominate both spot and derivatives markets.
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Price Surges To Retest New Highs
The 4-hour ETH chart depicts Ethereum surging above $4,800 following a sharp breakout from recent consolidation. This upswing follows a rebound near the 100-period SMA (green line around $4,298), where bulls aggressively defended support before initiating a vertical price move.
Ethereum is currently retesting its previous all-time high area around $4,860, with momentum indicating robust buying interest. The 50-period SMA (blue line) is starting to rise again, confirming a short-term bullish trend. Meanwhile, the 200-period SMA (red line around $3,994) remains well below the price, indicating that the overall uptrend is intact.
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This surge also breached a series of lower highs established during the recent pullback, suggesting that bearish dominance has diminished. Volume spikes during the breakout lend credence to the strength of this movement. If bulls maintain this momentum, Ethereum could enter price discovery, aiming for the $5,000 psychological level.
However, if a rejection occurs at $4,860, ETH may revisit the $4,400–$4,500 support zone, where the moving averages converge. The chart emphasizes a crucial phase: Ethereum either continues its breakout towards new highs or consolidates before attempting again. Bulls clearly hold the advantage following this explosive breakout.
Featured image from Dall-E, chart from TradingView
