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Ethereum Gains 90% in Q3 – Can ETH Breach Its 2021 Highs?
The cryptocurrency market has witnessed a significant surge in Ethereum’s (ETH) price, with the digital asset logging an astonishing 90% gain in Q3. This remarkable performance has sparked intense speculation about the possibility of ETH breaching its 2021 highs.
Ethereum’s current rally has been fueled by strong spot ETFs demand, which has seen a staggering influx of $3 billion worth of investment this week alone. Furthermore, the asset’s open interest has reached an all-time high of $35.5 billion, further underscoring the market’s risk-on sentiment.
One notable aspect of this rally is the divergent behavior between short-term holders (STHs) and long-term holders (LTHs). Typically, STHs would be quick to offload their positions in the face of such a substantial quarterly return. However, this cycle appears to be bucking that trend, with STH NUPL flipping above 0.35 for the first time since 2021.
This anomaly may signal that short-term holders are adopting a more cautious approach, allowing fear of missing out (FOMO) to dictate their decisions rather than traditional sell-side pressure. This could potentially lead to a squeeze in prices instead of a sharp decline, thereby mitigating the risk of a drastic pullback.
In conclusion, Ethereum’s incredible quarterly performance has set the stage for a potential breach of its 2021 highs. The combination of record open interest and aggressive derivatives activity suggests that even a slight sentiment wobble could spark a volatility spike.
Source: ambcrypto.com
