Ethereum price has surged for four consecutive days, reaching its highest point since July 3rd. The ETH token has rallied by 20% from its lowest point this month, entering a technical bull market. Several key factors have driven this uptrend.

Optimism Around U.S. Elections

There is growing optimism that Donald Trump, who is perceived as more crypto-friendly, will win the upcoming U.S. election in November. This sentiment gained traction after the first debate two weeks ago and intensified following an incident involving the former president over the weekend. High-profile endorsements from individuals like Elon Musk and Bill Ackman have further bolstered this view.

Trump is favored in the crypto community due to his past actions such as selling NFTs, opposing Central Bank Digital Currencies (CBDCs), and pledging to protect non-custodial wallets.

SEC’s Potential ETF Approvals

The second catalyst is the increasing likelihood that the Securities and Exchange Commission (SEC) will approve several spot ETFs. Companies like VanEck, Blackrock, and Invesco have already submitted their final filings. Analysts expect these approvals to happen as soon as this week.

Approval of an Ethereum ETF is significant as it is the second-biggest cryptocurrency in the market. However, investors will need to pay fees and forgo staking rewards that Ether holders typically earn.

Decreasing Exchange Supply

The third factor contributing to Ether’s rise is the decreasing volume of the token on exchanges. The supply has dropped to a record low of 16.76 million, down from over 32.5 million in July 2016. This scarcity is becoming more pronounced as the ETF approval nears.

Additionally, ETH price saw an uptick as futures open interest continued to rise. Data from CoinGlass indicated that open interest climbed to over $13.4 billion on Monday, up from this month’s low of $11.66 billion. Most of this interest originated from exchanges like Binance, Bybit, and Bitget.

Technical Support and Future Projections

Ethereum price found strong support at around $2,850 this month, a crucial level since it marked the lowest points on April 13th, May 1st, and May 14th of this year. This level is also significant as it is just above the 50% Fibonacci Retracement point.

The token has also flipped the 200-day Exponential Moving Average (EMA), which traders see as a positive sign for continued rally. The accumulation and distribution indicator has been rising, signaling that investors are buying the dip. The next key level to watch will be the psychological point at $3,500.

Both Bitcoin and ETH closed back above the 4H 200MA/EMA’s for the first time in a month. Trading above or below these tends to indicate market momentum and can signal a shift in the short to mid-term trend. The market generally looks good as long as we trade above these levels.

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