Ethereum is on the brink of a significant movement, even as its price hovers below the critical $3,500 resistance level—an obstacle that could set off over $1 billion in leveraged short liquidations.
Record Inflows in Ether ETFs
In December, the momentum behind Ether exchange-traded funds (ETFs) soared to unprecedented heights, accumulating over $2.1 billion in net inflows for the month, as reported by Farside Investors. This surge nearly doubles the slightly more than $1 billion gained in November, showcasing a remarkable shift in investor interest. By December 24, U.S. spot Ether ETFs had amassed a staggering $2.5 billion in total inflows since their launch on July 23, 2024.
Despite these record inflows, Ether faces challenges in breaking free from its downward trajectory, with a month-to-date loss of 8.4%. At 9:54 AM UTC, the cryptocurrency traded at approximately $3,353, according to Cointelegraph Markets Pro. While the market declines, some savvy traders have capitalized on these movements; one investor reportedly profited more than $1.1 million in just two days by executing a 50x short position on Ether—a clear bet on its further decline.
Potential for Price Increases
The recent surge in ETF inflows is interpreted by many as a beacon of hope for Ether’s price potential in the upcoming year. This optimism resonates with forecasts from asset management firm VanEck, which speculates that Ether could reach a peak of $6,000 in 2025.
The $3,500 mark is pivotal for Ethereum. Should the cryptocurrency manage to surpass this threshold, it could unleash a wave of liquidations in short positions exceeding $1 billion across various crypto exchanges, as indicated by CoinGlass data. Currently, Ether is trading about 31% lower than its all-time high of over $4,800, which it achieved on November 16, 2021.
Analyst Sentiment and Future Projections
Technical analysts suggest that Ether might be in an accumulation phase, potentially paving the way for a price boost above $4,400 in the first quarter of 2025. This analysis was highlighted by well-known crypto analyst TMV in a post dated December 28. TMV indicated a willingness to buy, even if the price dips slightly again, targeting a notable $4,400. However, there’s a note of caution; a fall below $2,914 could jeopardize the current accumulation narrative.
Sentiment among cryptocurrency analysts is generally optimistic regarding Ether’s future pricing as we enter early 2025. A representative from Bybit emphasized that a rise above $4,000 appears likely before January 20, coinciding with the inauguration of President-elect Donald Trump. As the landscape shifts, the combination of increasing ETF interest and potential market rebounds paints an intriguing picture for Ethereum’s upcoming year.
Source: Cointelegraph
