Ethereum lags even with traders’ big bets, rally to $4,500?

Ethereum has stabilized above $3,300, as cryptocurrency traders prepare for the inauguration of President-elect Donald Trump. Derivatives traders appear to be bullish on Ethereum, and open interest in Ethereum derivatives contracts has exceeded $30 billion as of Friday.

Ethereum Large portfolio investors continue to accumulate the token despite its lackluster price performance in 2024. The altcoin has a high correlation with Bitcoin, and recent market movers are driving gains in Ethereum.

Ethereum sees big bets from derivatives traders

Ethereum Derivatives data on Coinglass shows a roughly 47% increase in options trading volume over the past 24 hours, with open interest for derivatives hovering around $30 billion. Options volume exceeded $1 billion in a 24-hour time frame.

The long/short ratio, used to ascertain whether derivatives traders are bullish or bearish on the token, is larger than that on Binance and OKX. Derivatives traders are optimistic about the Ethereum price increase.

The chart below shows the increase in open interest in Ethereum since the last US presidential election. Open interest is below its peak of $31.99 billion, which was recorded on January 7, 2025.

Ethereum chain analysis

Derivatives traders’ expectations are a measure of what traders can expect in the spot markets. When combined with bullish on-chain metrics, derivatives traders’ expectations support the hypothesis of gains in the Ethereum price.

Santiment data shows that ether The supply of the token held by large portfolio investors has steadily risen, meaning that even as the price of ETH fell, traders continued to accumulate. This is a positive sign for Ethereum.

The total funding rate raised by Ethereum was mostly positive throughout January 2025. This represents optimism and hope for a price increase among traders.

Ethereum The value of what traders holding between 1,000 and 10,000 ETH in their wallets has increased in the past week. Likewise, holders with 1 million to 10 million Ether added to their Ethereum holdings between the last two weeks of 2024 and January 17, 2025.

Ethereum market movers

Farside Investors data shows that institutional capital flow into ether nearly doubled on Thursday. ETH Spot ETFs recorded inflows of $166.6 million on January 16, after $59.7 million the previous day.

Increased institutional interest is usually bullish for ether.

Another major driver of the market is the increasing on-chain activity of Layer 2 protocols. Data from GrowThePie shows that Ethereum Layer 2 chains saw rapid growth in active addresses, increasing by more than 300% in a year and surpassing 10 million weekly. Active portfolios in multiple second layers are relatively low, at less than 5%.

The growing adoption and utility of Layer 2 is contributing to higher main-chain revenues, supporting the ethereum growth thesis.

Technical analysis and ETH price forecast

The weekly ETH/USDT price chart shows Ethereum hovering around the $3,360 level early Friday. The altcoin is 22% below its 2024 peak of $4,107. Two technical indicators, the Relative Strength Index and the Moving Average Convergence Divergence, support Ethereum’s bullish theory.

The RSI is sloping upward and reading 53, and the MACD is flashing successive green histogram bars, supporting the bullish theory for Ethereum on the weekly time frame.

If Ethereum finishes its consolidation and breaks above the December 2024 high, the altcoin could target the $4,578 level and rally towards its previous all-time high of $4,878, as shown in the ETH/USDT weekly chart below.

Vitalik Buterin’s opinion on Ethereum Layer 2 and the future of Ethereum

Buterin recently commented on Sony Block Solution Labs’ Soneium. Buterin said the project demonstrates how Ethereum Layer 2 is “great for businesses and users” in a tweet to X.

Buterin believes that creating a free market at the Layer 2 level makes it more accessible and beneficial for businesses and users, supporting the growth of the Ethereum ecosystem. The idea is to consider Layer 2 pool operations as institutions set up in cities within the jurisdiction of the “Ethereum mainnet.”

The controversy surrounding Soneium has been the steps taken to protect intellectual property by placing restrictions on some contracts within the protocol. Although it may seem as if cryptocurrency traders have been quarantined, users can continue transactions on the Ethereum mainnet with a delay of a few hours.