Investors, traders, and crypto enthusiasts around the world have been closely monitoring the price movements of Ethereum (ETH) with great anticipation. The burning question on everyone’s mind is, “Why is the price of ETH rising today?” In this article, we delve into the various factors contributing to Ethereum’s recent price surge, which has garnered the attention of both seasoned traders and newcomers to the crypto market.

As of the latest data from Binance, Ethereum is trading at $1,668.63 per ETH, boasting a market capitalization of $200.63 billion USD. Over the past 24 hours, ETH has seen a modest increase of 0.77%, all while maintaining a circulating supply of 120.24 million.

What’s particularly intriguing is that Ethereum’s price seems unshaken by the occasional market downturns, prompting many to wonder about the underlying forces at play.

Ethereum’s Soaring Price: A Closer Look

On September 29, Ethereum’s price soared by nearly 2.5%, reaching $1,688, marking its highest level in a month. This surge was not isolated but rather part of a broader upward trend that commenced a day earlier when asset manager Valkyrie received regulatory approval to incorporate Ethereum futures exposure into its existing Bitcoin Strategy ETF (BTF).

This development was accompanied by speculation that the U.S. Securities and Exchange Commission (SEC) might soon greenlight the launch of several “Ethereum futures ETFs.” Impressively, there are fifteen ETH futures ETFs currently awaiting approval, with nine different issuers in the mix.

The anticipation surrounding the approval of an Ethereum ETF has driven a significant influx of capital into ETH derivatives markets. As of September 27, the aggregate ETH Open Interest stood at $4.16 billion. Within just 24 hours of the announcement, this figure had surged to $4.51 billion, indicating that investors had injected a substantial $450 million into the ETH futures market in anticipation of the SEC’s nod.

Macroeconomic Influences on Ethereum

Another noteworthy factor behind Ethereum’s recent rally is the release of the latest U.S. core personal consumption expenditures (PCE) statistics. These figures are highly regarded as the Federal Reserve’s favored inflation gauge, and they have had a notable impact on Ethereum’s performance.

In August, the PCE registered a 0.1% increase, falling slightly short of the market’s expectations of a 0.2% rise. This unexpected outcome served to alleviate some of the concerns surrounding growing U.S. government yields. Consequently, assets like stocks and cryptocurrencies, including Ethereum, experienced upward momentum.

The cooling inflation data has led to speculation that the Federal Reserve may opt to maintain interest rates within the current range of 525-550 basis points (bps). CME Fed futures rate data reflects an 87.5% likelihood of a rate pause at the upcoming Federal Open Market Committee (FOMC) meeting scheduled for November 1.

Price Gains Driven by Short Liquidations

Ethereum’s price gains on September 29 can also be attributed to significant short liquidations totaling $7.88 million in Ether-related futures. Simultaneously, long positions worth $1.7 million were liquidated on the same day.

Short sellers effectively closed their positions by purchasing the underlying asset, thereby contributing to the surge in Ether’s price. This combination of fresh buyers entering the market and short liquidations fueled the positive price movement.

The Future of Ethereum’s Price

Given the key factors we’ve examined, there is substantial speculation about the potential price trajectory of Ethereum. If the market reacts positively to the approval of ETFs, Ethereum could potentially reclaim the $2,300 price level.

However, it’s important to note that even as Ethereum’s price continues to rise, there have been surprising developments. Notably, Valkyrie Funds, a prominent player in the crypto market, has recently made some unexpected changes to its positions.

Eleanor Terret, a respected journalist at Fox Business, was the first to reveal these changes, sparking widespread curiosity within the crypto community. According to Terret’s report, Valkyrie Funds has decided to unwind all existing positions in Ethereum futures contracts purchased just about 24 hours earlier.

Furthermore, the company has announced that it will refrain from acquiring any additional ETH futures until a necessary amendment to the fund’s registration statement comes into effect. The exact nature of these proposed amendments remains undisclosed at this time.

Such adjustments in investment strategy, risk management, or operational aspects are typically made to ensure compliance with evolving regulatory standards. Valkyrie Funds’ decision has left investors and enthusiasts eagerly awaiting an official statement that provides clarity regarding the motivations behind these actions.

In conclusion, Ethereum’s recent price surge is a testament to the growing interest and confidence in the cryptocurrency market. As we await further developments, including potential ETF approvals and regulatory changes, the crypto community remains poised for what could be a significant chapter in Ethereum’s journey.