Ethereum lags even as derivative traders bet big on ETH rally, is return to $4,500 likely?

Ethereum lags even as derivative traders bet big on ETH rally, is return to $4,500 likely?

Ethereum Holds Strong Above $3,300 as Market Awaits Trump Inauguration

The price of Ethereum (ETH) remains stable above the $3,300 mark as traders and investors prepare for the inauguration of President-elect Donald Trump. With derivatives traders showing strong bullish sentiment, Ethereum’s open interest in futures and options contracts has surged past $30 billion as of Friday.

Ethereum’s Growing Investor Interest

Despite a relatively sluggish price performance in 2024, large wallet investors continue accumulating Ethereum. The altcoin’s correlation with Bitcoin remains high, and recent market trends indicate a positive outlook for ETH’s future gains.

Ethereum Sees Strong Bets from Derivatives Traders

Data from Coinglass reveals a nearly 47% surge in Ethereum options trade volume within the past 24 hours, pushing open interest to approximately $30 billion. Within this period, options volume alone surpassed $1 billion.

A key indicator of market sentiment, the long/short ratio, is currently greater than one on major exchanges such as Binance and OKX, indicating a bullish stance from traders who anticipate an increase in Ethereum’s price.

Ethereum Derivatives Market Insights

The chart below highlights the increase in Ethereum open interest following the most recent U.S. presidential election. Although it remains below the January 7, 2025 peak of $31.99 billion, investor sentiment continues to trend upward.

Ethereum On-Chain Analysis

The outlook of derivatives traders often reflects expectations in spot markets. When combined with bullish on-chain metrics, this suggests a strong potential for Ethereum price growth.

Data from Santiment indicates that Ethereum held by large wallet investors has been steadily rising. Even during price dips, accumulation has continued, demonstrating investor confidence in Ethereum’s long-term value.

Ethereum’s total aggregated funding rate remained mostly positive throughout January 2025, further reinforcing optimism among traders.

Ethereum Accumulation by Large Wallet Holders

The supply of Ethereum held by investors with wallets containing between 1,000 and 10,000 ETH has increased over the past week. Similarly, investors holding between 1 million and 10 million ETH have expanded their holdings between late 2024 and mid-January 2025.

Ethereum Market Movers

Institutional investment into Ethereum has surged, with data from Farside Investors showing that Ether Spot ETFs recorded $166.6 million in inflows on January 16, a significant increase from the previous day’s $59.7 million.

Historically, rising institutional interest has been a bullish signal for Ethereum’s price.

Ethereum Layer 2 Growth Supports ETH’s Expansion

Ethereum’s growing Layer 2 ecosystem is another key driver of ETH’s value. Data from GrowThePie reveals that active addresses on Layer 2 chains have surged by over 300% in the past year, surpassing 10 million weekly users. While multi-chain wallet adoption remains under 5%, this growing activity contributes to Ethereum’s overall network revenue and supports its price appreciation.

Technical Analysis and ETH Price Forecast

Ethereum is currently trading around $3,360, which is approximately 22?low its 2024 peak of $4,107. Two key technical indicators, the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD), suggest a bullish outlook.

• RSI: Trending upwards at a reading of 53, signaling positive momentum.

• MACD: Consecutive green histogram bars reinforce a bullish trend on the weekly timeframe.

If Ethereum breaks above its December 2024 peak, it could target the $4,578 resistance level and potentially rally toward its all-time high of $4,878.

Vitalik Buterin on Ethereum Layer 2 and ETH’s Future

Ethereum co-founder Vitalik Buterin recently commented on the launch of Sony Block Solution Labs’ Soneium project. He described it as a prime example of how Ethereum Layer 2 solutions benefit both businesses and users, emphasizing their role in expanding Ethereum’s ecosystem.

Buterin highlighted that Layer 2 rollups function as independent enterprises within the “Ethereum mainnet” framework, enhancing efficiency and accessibility for businesses while supporting the overall network’s scalability.

While some controversy exists regarding Soneium’s intellectual property protections, users can still transact on the Ethereum mainnet, albeit with slight delays. This illustrates the ongoing evolution of Ethereum’s infrastructure, which continues to attract institutional and retail investors alike.

Conclusion

As Ethereum maintains its position above $3,300 and derivatives traders remain bullish, market sentiment suggests further price growth in the coming weeks. Institutional adoption, rising Layer 2 activity, and strong on-chain metrics all contribute to Ethereum’s bullish outlook. If these trends persist, ETH could soon challenge key resistance levels and revisit its previous all-time highs.