Ether's Dramatic Rebound: Bull Run on the Horizon?

Ether's recent price action has sparked speculation that the cryptocurrency may be poised for a bull run, as its movements mirror those seen during the early August bottom. After a steep decline of 32% since mid-December, Ether (ETH) has lagged behind its larger rival, Bitcoin (BTC), and experienced significant volatility. On Monday, prices plummeted to nearly $2,000 on several exchanges before rebounding to $2,700, marking the biggest one-day swing since September 2021.

The dramatic two-way price action resulted in a surge in trading volumes on platforms like Coinbase (COIN) and Bitstamp, reaching levels not seen since August. This spike in volume suggests that selling pressure may have peaked at the beginning of the week, leaving fewer potential sellers in the market. If this pattern holds, it could help stabilize prices and set the stage for a rally.

This scenario is reminiscent of the events that unfolded on August 5, when ETH hit a low of around $2,100 in a two-way action on the back of high volumes. Following this low, the cryptocurrency stabilized in the $2,200-$2,800 range for a few weeks before breaking into a new uptrend that saw prices rise to $4,100.

Demand during Monday's dip supports the bullish case for Ether. Jake Ostrovskis, an OTC trader at crypto market maker Wintermute, noted strong over-the-counter demand for ETH amid broker chatter about a fund blowing up amidst weekend volatility. Additionally, U.S.-listed spot ether ETFs have registered $420 million in net inflows this week, according to Farside Investors. This represents nearly 13% of the total $3.18 billion inflow since inception.

A large bull call spread crossed the tape on Deribit this week, involving a long position in the $3,500 call option and a short position in the $5,000 call option, both expiring on Dec. 26, 2025. This strategy aims to profit from a rally to $5,000 and higher by the year-end, further indicating bullish sentiment among traders.