Published Nov 20, 2023 01:57PM ET
The cryptocurrency has surged to $2,000 today, buoyed by investor enthusiasm following BlackRock (NYSE:)’s recent Ethereum ETF filing. This significant milestone in ETH’s value is coupled with a notable shift of 152,583 ETH to cold storage, as reported by CryptoQuant’s Exchange Reserves metric. The move has reduced exchange reserves to a five-year low of just 14.3 million coins, a level last observed in July 2018. This dwindling supply on exchanges could signal an impending scarcity that may drive prices even higher, potentially edging closer to the all-time high of $4,891 seen back in 2021.
Earlier today, the market saw an immediate bullish reaction to BlackRock’s ETF application, with Ethereum’s price jumping and derivatives trading sentiment turning positive. The funding rate for ETH contracts reached 0.034%, reflecting the market’s anticipation of arbitrage opportunities that could further influence open interest and funding rates. Strategies involving spot buying and contract shorting are expected to play a role in this dynamic.
Additionally, the stablecoin supply could impact market movements. BlackRock’s step towards an Ethereum ETF is viewed as a major nod of institutional validation for Ethereum and sets it apart from ‘s recent performance. This was evidenced by a 10% rebound in the exchange rate today. Data from Coinglass showed a more than 16% increase in open interest across the ETH derivatives market. High trading volumes and volatility are anticipated to continue as strategic short-term trading looks to take advantage of price swings and funding rate disparities brought on by heightened institutional activity.
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