3 Reasons Why Ethereum Surged 4% Over the Weekend

Ethereum (CRYPTO: ETH) is one of the megacap cryptocurrencies making big moves in today's session. As of 3:30 p.m. ET Monday, the world's second-largest digital asset is up 4% since Friday at 4 p.m. ET. That's a move inspiring investors to reconsider the bearish positions they may have put on amid a marketwide sell-off seen not only in the crypto market, but among other higher-risk asset classes as well.

Let's dive into three key reasons why Ethereum has rebounded so nicely of late.

1. Shutdown fears wind down, macro environment improving

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With a market capitalization of more than $430 billion at the time of writing, Ethereum is an asset class unto itself, with an investment thesis that can feed off big macro shifts in the political and broader macro environment. News that a bill that will reopen the government is being voted on in short order by the House and is expected to go to the president's desk for signing has investors scrambling to take bullish positions on risk assets that have been beaten down in recent days, in part due to concerns this shutdown could drag on much longer than expected.

2. Institutional capital inflows picking up

Last week's rout in spot Bitcoin and Ethereum ETFs saw more than $1 billion leave these exchange-traded fund vehicles. However, more recent data today points to solid capital inflows likely on the way, with Ethereum's total value locked (a measure of capital inflows) steadying over the past 24 hours.

If we do see a reversion of capital flows back into Ethereum ETFs (data to come later in the day), other factors tying into these trends such as liquidations data could point to material catalysts traders will jump on to drive further upside momentum in this top token.

3. Fusaka upgrade still on its way

Perhaps the most important catalyst investors are watching when it comes to Ethereum is the network's next (and long-awaited) Fusaka upgrade on Dec. 2. This upgrade will provide greater capacity on the Ethereum blockchain for data to be stored, stabilize and increase security in staking on the Ethereum network, and provide barriers for developers looking to leave the Ethereum network for other chains.

All told, these catalysts are culminating in a strong upward move. As of right now, this strength looks poised to continue, but I'll be keeping a close eye on Ethereum moving forward to see if that's the case.

Chris MacDonald has positions in Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.