Ethereum Has a Chance of Going on a Monster Rally: Market Analyst

The crypto market, led by bitcoin (BTC), is experiencing significant price movement due to euphoria from the just-concluded United States presidential elections. Assets like ether (ETH) have rallied in the past 24 hours, but market participants believe there is still more room for growth.

Pseudonymous crypto trader and analyst Byzantine General tweeted that ETH has a chance of going on a “monster rally” based on indications suggested by several on-chain signals.

A Monster Rally

According to Byzantine General, Ethereum is seeing a massive build-up of open interest. Open interest refers to the total number of options and futures trading contracts for an asset yet to be settled.

Byzantine General said the Ethereum open interest is saturated with non-neutral short trades, meaning that traders expect the value of ETH to decline. The analyst believes this presents a “real chance” for the cryptocurrency to explode, possibly leading to a short squeeze that will be talked about for years.

If ETH experiences a short squeeze, the asset’s price will spike unexpectedly, pushing traders who made short calls to buy back immediately to minimize their losses. This eventually leads to a surge in demand and an even higher rally in prices. 

Explaining to their followers the reason behind the belief that Ethereum open interest is dominated by short trades, Byzantine General disclosed that although funding just turned positive, the cryptocurrency’s open interest has seen a three-month build-up of negative and default funding. 

ETH is Too Cheap?

Byzantine General’s prediction aligns with that of Dan Tapiero, the founder and CEO of blockchain growth equity fund 10T Holdings, who stated that ETH is currently “too cheap” and will explode from its current price level.

Data from CoinMarketCap shows ETH changing hands at $2,810 at the time of writing, after an 8% increase in the past 24 hours. The last time ETH traded at this level was in early August. Per Tapiero’s prediction, ETH will soon hit $4,000 and surpass $8,000 by 2025.

This rally could be fueled by inflows into the United States Ethereum exchange-traded funds (ETFs) as the country’s regulatory environment becomes more favorable for the crypto industry in the coming months.