Ethereum Surges 40% in Two Weeks, Spot Demand Drives Rally

Ethereum (ETH) has experienced a significant surge, gaining over 40% in the past two weeks and trading in the mid-$2,000 range. This rally is notable because it appears to be driven more by spot market demand rather than leveraged trading, which is a positive indicator of a potentially sustainable bull run. After lagging behind other major cryptocurrencies like Bitcoin (BTC), Solana (SOL), and XRP for much of the past year, ETH is now showing signs of an organic uptrend. According to CryptoQuant analyst ShayanMarkets, the current momentum is primarily spot-driven, rather than fueled by speculative futures trading.

In a recent analysis, ShayanMarkets highlighted that ETH funding rates have remained relatively flat despite the price surge. This is significant because funding rates typically reflect sentiment in the perpetual futures market. Funding rates are periodic payments exchanged between traders in perpetual futures contracts to keep the contract price aligned with the spot price of the asset. Positive funding rates indicate that long positions are paying shorts, typically signaling bullish market sentiment, while negative rates suggest bearish sentiment. In Ethereum’s case, flat funding rates during this recent rally indicate that the upward price action is being powered by genuine buying in the spot market, not speculative leverage. This makes the uptrend less prone to sudden reversals triggered by mass liquidations.

Ask Aime: Can Ethereum's recent rally be sustained, and how might it affect other crypto assets?

For the bullish momentum to be sustained and validated, funding rates should begin to rise, reflecting increased confidence and more aggressive positioning by futures traders. Meanwhile, other analysts predict further upside for ETH. For instance, noted crypto analyst Ali Martinez recently remarked that if ETH can decisively break through the $2,380 resistance level, then it could enter a new bull rally. In his latest post, Martinez emphasized that ETH’s new critical support range lies between $2,060 and $2,420. The analyst noted that close to 10 million wallets hold more than 69 million ETH between these levels.

Although Ethereum remains well below its all-time high (ATH) of $4,878 reached in November 2021, many market watchers believe a new ATH for the second-largest cryptocurrency by market cap could be on the horizon. In the same vein, crypto analyst Titan of Crypto recently noted that ETH is following a V-shape recovery. The analyst shared a weekly chart that compares BTC and ETH price action, predicting that ETH is likely to follow BTC’s trajectory. Meanwhile, analyst Ted Pillows outlined five bullish factors that could push ETH to $12,000 in 2025 – including favorable regulatory developments and strong inflows into spot exchange-traded funds (ETF).