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The Potential Impact of Ethereum Price Moving Above $2,500

Ethereum’s recent price movement above $2,500 on Jan. 15 has extended its lead over BTC following the approval of the ETF. Understanding the underlying drivers of this trend is crucial, and on-chain data provides valuable insights.

ÔÇÿBuy-the-rumor, sell-the-newsÔÇÖ is a popular trading strategy where speculators make acquisitions ahead of a material news event in hopes of selling at a profit when the news is confirmed. BTC speculators capitalized on this strategy and earned historic gains in the build-up to the spot Bitcoin ETF approval verdict. However, on-chain data now reveals that Ethereum (ETH) has also begun to show early signs of a similar phenomenon.

BTC Speculators Earned 97% Profits in Build-up to ETF Approval

The Bitcoin spot ETF approval quest suffered multiple setbacks recently, but things turned positive when BlackRock (NASDAQ: BLK) officially filed for a spot Bitcoin ETF with the SEC. The entry of a major player like BlackRock raised optimism about Bitcoin derivatives and effectively spun the rumor mill. Consequently, speculators saw significant profits leading up to the eventual confirmation of the ETF approval by the SEC.

With the Bitcoin ETF now concluded, investor attention has shifted to Ethereum. BlackRock filed for a spot Ethereum ETF on Nov. 16, and recent moves indicate growing interest in ETH as an asset class.

Despite a 3.8% drop in BTC price, Ethereum has experienced a 13.5% increase in the past week, outperforming BTC by approximately 10%. This divergence, coupled with strategic on-chain movements from Ethereum whales, suggests that the buy-the-rumor strategy is playing out in the ETH markets.

Ethereum Whales Acquire $1.4 Billion ETH Since Bitcoin ETF Approval Verdict

Looking beyond price charts, on-chain indicators reveal that the recent ETH performance has been boosted by corporate entities and high net-worth investors, who increased their buy pressure shortly after the Bitcoin ETF approval verdict. The accumulation of ETH by the largest stakeholders signifies a strong bullish signal and indicates growing confidence in the cryptocurrency’s ecosystem.

The timing of the recent buying spree suggests that investors are buying the rumor with optimism that BitcoinÔÇÖs ETF approval will increase the likelihood of a positive verdict for ongoing ETH applications with the SEC.

ETH Price Forecast: Can Ethereum Reach $5,000 in 2024?

The analysis of large holder walletsÔÇÖ accumulation and the rising ETH dominance suggests that the buy-the-rumor strategy is now widely in play in the Ethereum markets. Given Bitcoin’s performance in the build-up to the spot ETF approval verdict, a similar performance could put ETH on track to reach $5,000 in the instance of a positive outcome.

In the short term, the ETH bulls will have to scale the $2,900 resistance to keep the momentum going. With the ETH ETF approval process on the front burner, current ETH holders in profit positions may be less inclined to sell, potentially supporting the upward movement of ETH price.

However, the 8.5 million Ethereum holders who bought 4.1 million ETH coins could pose significant resistance if they book early profits as prices approach their break-even point. On the flip side, the largest cluster of ETH current holders, who acquired ETH at the maximum price, may have enough in the tank to withstand bearish pressure if the price unexpectedly retreats below $2,000.

How AI legalese decoder Can Help

The AI legalese decoder can assist in analyzing the legal ramifications of ETF approvals and how they impact cryptocurrency prices. It can interpret complex legal language, quickly identify key insights, and provide valuable guidance to traders and investors in the volatile cryptocurrency market. Furthermore, the AI legalese decoder can help identify potential legal hurdles for ETF approvals and provide clarity on the regulatory landscape, enabling informed decision-making for market participants.

Additionally, the AI legalese decoder can process vast amounts of legal information and track regulatory developments in real-time, allowing traders and investors to stay ahead of market movements and make strategic decisions based on legal and regulatory factors.

Overall, the AI legalese decoder serves as a valuable tool for navigating the legal complexities of cryptocurrency markets and understanding the implications of ETF approvals and other regulatory events.

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