Ethereum continues long-awaited comeback with a surge past $4,000

Ethereum just smashed through the $4,000 barrier, a level it hadn’t touched since March. This milestone is being driven by record-breaking inflows into U.S.-listed Ethereum spot ETFs.

On December 5, these ETFs saw an eye-popping $428 million in net inflows, the highest one-day figure ever recorded, according to data from SoSoValue.

This surge comes in the shadow of Bitcoin breaking past $100,000. Ethereum is quietly building its own rally, with investors betting it could soon topple its 2021 all-time high. Since November 5, when Donald Trump won the presidential election, Ethereum’s price has climbed 61%, outperforming Bitcoin.

Trump’s win also reignited hopes for regulatory changes, especially with his appointment of the pro-crypto Paul Atkins as the new head of the Securities and Exchange Commission (SEC).

Inflows and futures frenzy

Ethereum’s rally is being powered by institutional interest. U.S.-listed Ethereum ETFs are seeing unprecedented activity. The $428 million that poured into these funds in one day highlights the growing appetite for Ethereum among big-money players.

This demand is particularly interesting because Ethereum ETFs, unlike staking directly in the network, don’t generate staking rewards for holders. Despite this limitation, the inflows show strong investor confidence.

The futures market tells the same story. Open interest in Ethereum futures contracts on the CME Group exchange has hit record highs. 

Ethereum’s network data is equally bullish. Its Realized Cap—a metric that calculates the value of coins based on their last transaction price—has hit a record high of $243.45 billion. This indicator had been in decline from August to November, but the recent spike signals renewed confidence.

Historically, increases in the Realized Cap have preceded major price surges. Glassnode data shows that the rise in Ethereum’s Realized Cap reflects a repricing of ETH as coins last moved at lower prices. This suggests holders are becoming more confident, pushing Ethereum’s value higher.

For traders betting against Ethereum, this could be a dangerous sign. Another metric, the Market Value to Realized Value (MVRV) Long/Short Difference, backs up the bullish outlook. This indicator measures the unrealized profits of long-term holders compared to short-term ones.

Ethereum’s MVRV is now at 5.67%, entering a positive zone that signals undervaluation. Santiment, a blockchain analytics firm, notes that similar MVRV levels have historically led to significant price rallies.

The last time Ethereum followed this pattern, its price surged to $4,100. If this trajectory holds, the current rally could still have plenty of room to run.

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