Ether (ETH) Could See Price Volatility Soon Due to These Metrics: CryptoQuant

Throughout the week, Ethereum (ETH) received a large share of cryptocurrency investors' attention as anticipation grew over approvals for its exchange-traded funds (ETFs).

While crypto assets rose significantly as the market awaits the US Securities and Exchange Commission (SEC) decision on ETFs, CryptoQuant analysts said It has been identified Chain dynamics that may lead to major fluctuations soon.

Demand for ETH surges after ETF approval

Earlier this week, Ethereum rose 25% in two days, surpassing $3,900, its highest level since mid-March. The surge occurred after market experts, led by Bloomberg ETF analysts, increased the odds of the SEC approving the funds from 25% to 75%.

CryptoQuant revealed that ETH prices have received upward pressure from traders in the perpetual futures market and perpetual holders of the cryptocurrency.

Perpetual futures market traders “aggressively” opened long positions on Ethereum anticipating higher prices as ETF approval rumors spread. As a result, total open interest in the futures market rose to its highest level since January 2023, from 2.8 million ETH to 3.2 million ETH ($11.7 billion) within a few hours.

Traders gained greater exposure to ETH compared to BTC, as shown by the Ethereum-Bitcoin open interest ratio, which rose from 0.54 to 0.67. The rally revealed that Ethereum's total open interest was 67% of Bitcoin, suggesting that market participants would prefer more exposure to Ethereum compared to the largest digital assets on margin.

Additionally, buy orders dominating sell orders in the perpetual futures market have put upward pressure on Ethereum prices, as seen in the buy-to-sell ratio hovering above one.

ETH exchange inflows rise

Furthermore, demand for Ethereum gained momentum, with permanent holders amassing over 100,000 ETH, their highest daily level since September 2023, within 24 hours. Likewise, the amount of ETH accumulated was recovered. After falling to 32.4 million on May 20, the amount of ETH rose again to 32.5 million, showing investors' confidence in the cryptocurrency.

As demand for Ethereum surged, the asset's daily net inflows to exchanges rose to 62,000, the highest level since early March. The majority of the flows went to cryptocurrency exchanges Binance and Bybit. High exchange flows are historically associated with price volatility, as investors may want to sell their assets to take advantage of a potential price rise following ETF approval, CryptoQuant said.

Meanwhile, Ethereum He was hovering About $3,700 at the time of writing, having risen 1% over the past 24 hours.