Ethereum Surges 5.5% Amid ETF Proposal and Whale Accumulation

Ethereum, the second-largest cryptocurrency by market capitalization, has witnessed a significant surge in its price, climbing 5.5% to trade around $2728. This upward trend has sparked curiosity among crypto enthusiasts, seeking to understand the reasons behind this rally.

One of the primary factors driving Ethereum's price increase is the recent proposal for an Ethereum ETF. Cboe BZX Exchange has filed a request with the U.S. Securities and Exchange Commission (SEC) to allow staking for the 21Shares Core Ethereum ETF. If approved, this would enable Ethereum holdings to earn rewards while remaining secure with the custodian, reducing security risks and potentially attracting more institutional investors.

In addition to the ETF proposal, large whale investors have been accumulating massive ETH holdings, further boosting the cryptocurrency's price. On-chain data reveals that over 600,000 ETH was purchased by whales last week alone. When whales buy in large amounts and move their holdings off exchanges, it reduces the available supply, creating buying pressure and pushing the price higher.

Another key factor contributing to Ethereum's rise is the growing adoption of Layer 2 solutions. Tether, the largest stablecoin by market capitalization, recently announced it will use Ethereum's Arbitrum network to support a new cross-chain system. This move strengthens Ethereum's position as a leading blockchain for financial applications, with lower transaction costs and faster processing times. As more companies adopt Ethereum's Layer 2 solutions, its value is likely to increase.

Analysts have identified strong potential for further Ethereum price gains. ETH has been trading within a key range since early 2024, holding support near $2,200 while facing resistance around $4,100. To continue its upward trend, Ethereum needs to break above the $2,817 to $3,000 range. If ETH secures support at this level, it could set the stage for a rally toward $4,000. However, technical indicators like the Relative Strength Index (RSI) and Stochastic Oscillator suggest that bearish momentum still exists, and traders should remain cautious.