This influx in ETF inflows coincided with ETH's impressive price rise over the past week, which was fueled by optimism around regulatory developments and the potential for a pro-crypto SEC chair. Leveraged ETH products also saw a surge in demand, with positions in VolatilityShares 2x Ether ETF growing 160%. While ETH’s price creeps toward $4,000, investor sentiment is still a bit mixed because of growing short positions, though market indicators suggest there is still room for ETH's price to grow. Altcoins, including Ethereum, still face challenges from Bitcoin's dominance, which remains high but could decline in the coming months. Ether ETFs Record Impressive Inflows Ethereum exchange-traded funds (ETFs) have attracted a lot more investor interest than their Bitcoin counterparts over the past days. In fact, spot Ether ETFs recorded $224.9 million in net inflows from Nov. 22 to 27. In contrast, spot Bitcoin ETFs only tallied $35.2 million in net inflows over the same period. This was mainly due to a big day of outflows on Nov. 25. This was a pivotal moment for Ethereum as its price surged by close to 8% over the past week. Ethereum ETF flow (Source: Farside Investors ) The rise in Ethereum's price has been linked to a number of developments, including a U.S. court victory for the Ethereum-based privacy tool Tornado Cash and speculation that former SEC commissioner and crypto advocate Paul Atkins could replace Gary Gensler as the SEC’s chair. Industry experts believe that these factors signal a potentially more crypto-friendly regulatory environment, which is contributing to the growing optimism around Ethereum. ETH’s price action over the past week (Source: CoinMarketCap ) The ETH to BTC price ratio also climbed, with Ethereum rising 7.7% in the past week compared to Bitcoin’s 2% decline, bringing the ratio to 0.037 BTC. Despite Bitcoin ETFs experiencing a record-breaking November with $6.2 billion in net inflows, Ethereum’s recent performance outpaced Bitcoin, and for the first time, raised the prospect of Ether funds beating Bitcoin ETFs in weekly net inflows. Markus Thielen , founder of 10x Research, pointed out Ethereum’s dominance in decentralized finance (DeFi) as a driving factor behind its recent rally. He also mentioned that the potential appointment of a pro-crypto SEC chair under the Trump administration could boost Ethereum’s outlook even more. Thielen also suggested that Ethereum’s recent gains could reflect a ”catch-up trade” as it looks to close the gap with Bitcoin and Solana during this bull cycle. Investor Appetite for Leveraged ETH Skyrockets Investor interest in leveraged Ethereum-based trading products also surged. This could suggest that there is very strong momentum that might push the altcoin’s price past the critical $4,000 mark. Leveraged positions allow traders to borrow funds to amplify their exposure. These positions have seen a lot of growth in demand, particularly for the VolatilityShares 2x Ether ETF. Since Nov. 5, the fund's exposure increased by 278,150 ETH, which is a 160% rise, according to the head of research at K33 Research Vetle Lund . This surge means VolatilityShares now accounts for more than half of the open interest in CME’s Ether futures. This increase in leveraged trading demand started after the election of President-elect Donald Trump on Nov. 5, which has fueled appetite for riskier assets like cryptocurrencies. Although Ethereum’s price recently lagged behind Bitcoin, market analysts suggest this dynamic could shift very soon as Ether rebounds from its recent slump. Some technical forecasts predict Ethereum could reach as high as $20,000 during the peak of the 2025 bull cycle. Bitcoin , meanwhile, reached an all-time high of $99,800 before experiencing a correction to around $91,000. Analysts also expect a possible 30% pullback in Bitcoin’s price before it surpasses $100,000. This range-bound trading behavior could act as a catalyst for Ethereum’s growth. Crypto analyst Rekt Capital shared that Bitcoin’s consolidation between $91,000 and $100,000 may create an environment conducive to Ethereum gaining leadership in the market and driving funds into smaller altcoins. ETH Holders in Profit Ethereum holders are experiencing a profitable streak, and it is estimated that about 90% of them are now in the green thanks to ETH’s price rise over the past week. However, some traders still seem cautious about Ethereum surpassing the $4,000 mark, especially as short positions against this key psychological level continue to grow. Data from CoinGlass indicates that $1.43 billion in short positions could face liquidation if Ethereum reaches $4,000. According to a recent post by IntoTheBlock , 90.8% of Ethereum holders are currently in profit, making it the highest level since June. The remaining 9.2% of holders at a loss are just 2.8% of the total supply. This suggests that there is very limited sell pressure from this group. Ethereum last crossed the $4,000 level in March, during a period when Bitcoin hit its previous high of $73,679. Since then, Ethereum has traded within a narrow range between $2,223 and $4,066, even after the launch of spot Ether ETFs in July. Despite the cautious sentiment, market indicators now point to potential upside for Ethereum. CryptoQuant contributor ShayanBTC noticed a big increase in Ethereum’s funding rates, which are still below the levels seen during its all-time high of $4,900. This suggests Ethereum has not entered an overheated state just yet, which leaves room for more growth. Binance’s funding rate for Ethereum stood at around 0.0162% at the time of publication. Other well known crypto traders and analysts are also optimistic about what lies ahead for ETH. Trader Ash Crypto told their audience that Ethereum is “very close” to reaching $4,000. Meanwhile, trader Borovik playfully promised to get his first-ever tattoo, featuring the Ethereum logo, if the cryptocurrency hits $15,000 this cycle. Crypto analyst Lark Davis also maintained his bullish stance on the altcoin, and set a $15,000 price target for Ethereum. Bitcoin Dominance Clouds Altcoin Rally Prospects Altcoins are expected to experience volatility with big rallies and pullbacks until Bitcoin firmly breaks past the $100,000 mark, according to Swyftx lead analyst Pav Hundal . At Aus Crypto Con 2024 , Hundal stated that while there are standout performers among altcoins, the overall market is still “choppy” as it awaits Bitcoin’s next move. Bitcoin narrowly missed the six-figure milestone on Nov. 23, before retreating. Hundal also shared that while some altcoins may post short-term gains of 20% to 40%, these are often followed by swift retracements. Solana’s recent performance was a perfect example of this trend. SOL gained 13% on Nov. 21, but these gains were almost completely erased over the following days. Similarly, meme coins like Pepe ( PEPE ) saw sharp price surges, like its 93+% jump on Nov. 15, which was then followed by a retracement. For a decent altcoin rally to happen, Hundal believes in the importance of declining Bitcoin dominance, which currently stands at 58.3%. He predicts Bitcoin’s dominance could rise to as high as 70% before a reversal allows altcoins to gain some traction. This metric measures Bitcoin’s market capitalization relative to the total crypto market and is often considered to be a key indicator of capital rotation into altcoins. However, some market participants, including CryptoQuant CEO Ki Young Ju , are still a bit skeptical about the possibility of a traditional altcoin season. Ju pointed out that the current Bitcoin rally is largely driven by institutional investors and ETF buyers, who typically show very little interest in speculative altcoins. He also pointed out that for altcoins to reach new all-time highs, they will require a large influx of fresh liquidity from retail investors, which is currently lacking. Trader Mikybull Crypto speculated in a recent post that sharp declines in Bitcoin dominance could start as early as next month, which could signal an altcoin resurgence. Nonetheless, Ju warned that institutional involvement in this cycle could lead to a fundamentally different market dynamic compared to previous bull runs.
