©Reuters
The cryptocurrency hit $2,000 today, driven by investor enthusiasm following BlackRock’s (NYSE:) recent filing for an Ethereum ETF. This milestone in ETH value is coupled with a notable shift of 152,583 ETH into cold storage, as indicated by CryptoQuant’s exchange reserves metric. This move reduced exchange reserves to a five-year low of 14.3 million coins, a level last seen in July 2018. This decrease in supply on exchanges could signal a shortage imminent that could send prices even higher, potentially approaching the all-time high of $4,891 reached in 2021.
Earlier today, the market immediately reacted to BlackRock’s ETF demand with a rise in the price of Ethereum and positive sentiment on derivatives trades. The funding rate for ETH contracts reached 0.034%, reflecting the market’s anticipation of arbitrage opportunities that could further influence open interest and funding rates. Strategies involving spot buying and shorting contracts are expected to play a role in this dynamic.
Additionally, the supply of stablecoins could impact market movements. BlackRock’s step toward an Ethereum ETF is seen as a major sign of institutional validation of Ethereum and sets it apart from the recent performance of . This resulted in a 10% rebound in the exchange rate today. Data from Coinglass showed an increase of over 16% in open interest in the ETH derivatives market. High trading volumes and volatility are expected to continue as short-term strategic trades seek to take advantage of price fluctuations and funding rate disparities caused by increased institutional activity.
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