The price of Ethereum’s Ether (ETH) is up today, rising 3.5% to reach over $3,630 on March 31. ETH price is now up 18.75% from its local low of around $3,050, established over a week ago.
Let’s delve into the factors that have influenced Ether’s price gains in recent days.
Capital rotation into Ether market
Ether’s ongoing rise versus the U.S. dollar coincides with its equally strong gains against Bitcoin (BTC).
Notably, the widely-tracked ETH/BTC pair has gained roughly 2.5% on March 31 to reach 0.051 BTC suggesting a possible rotation of capital in the short term.
Additionally, Ether’s performance against the broader cryptocurrency market has improved significantly over the last 48 hours, highlighted by a 2.16% increase in the Ethereum Dominance Index (ETH.D) from its low on March 29.
This trend underscores a rising flow of capital into the Ether market from competing altcoins, bolstering ETH’s value in terms of the dollar.
Return of Ethereum whales
Ether’s latest gains precede a period of accumulation among its richest investors, also known as whales.
According to data resource Glassnode, entities holding between 1,000 and 10,000 ETH have increased their Ether reserves by approximately 1.15% in March.
Interestingly, this accumulation pattern has often been a precursor to significant price upsides, such as the one ETH/USD is witnessing today.
ETH funding rate hits three-week high
Ether’s price gains today occur alongside a sharp rise in its funding rates in the perpetual contracts market.
Related: SEC’s spot Ether ETF concerns unfounded, Consensys asserts
Notably, as of March 31, the funding rate for Dogecoin perpetual futures contracts was 0.0591% per eight hours, or 1.24% per week, the highest since March 12, indicating that the cost of holding long positions is rising.
At the same time, Ether’s open interest, or the total number of outstanding derivative contracts, has stabilized around $14 billion after reaching an all-time high three days ago.
A stabilizing open interest with a rising funding rate indicates traders are borrowing more to finance their long positions, expecting the asset’s price to rise and hoping to amplify their returns.
Technicals: ETH price rebound
Ether’s price gains have surfaced after testing the lower trendline of what appears to be its rising wedge pattern. The cryptocurrency has received further support from its 0.236 Fibonacci retracement level near $3,485.
A rising wedge is a bearish reversal pattern that typically resolves after the price breaks below its lower trendline and falls by as much as the wedge’s maximum length. So, ETH’s price target for April appears around $3,280 if the rising wedge pattern plays out.
Conversely, ETH’s price will likely climb to over $4,000 — toward the 0.0 Fibonacci retracement level — by April’s end if the price breaks above the wedge’s upper trendline.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
