BitMEX co-founder predicts ETH to reach $5,000?

Author: BitpushNews Mary Liu

While other Crypto Assets such as Solana (SOL) and Cardano (ADA) performed strongly, Ethereum (ETH) performed relatively lacklusterly, belating to break the $2,500 mark.

However, BitMEX co-founder Arthur Hayes optimistically predicts that Ethereum could soon reach new all-time highs. “I dumped SOL and bought more ETH, ETH = $5,000,” he said on social media platform X. ”

Prior to this, Hayes had predicted that the price of Solana would reach $100, a prediction that proved to be quite accurate, and SOL recently rebounded to $99.6.

At the time of writing, Ethereum is trading at $2,270, down 2.7% in 24 hours.

Funding rate spike hints at a key $2,500 position

The Ethereum funding rate has recently risen significantly, indicating that traders generally expect further increases, targeting $2,500. Data from crypto Derivatives tracker Coinglass shows that the ETH funding Intrerest rate soared to 0.045%. Indicates that traders tend to be bullish on the asset and are willing to pay a premium to take a long position. This optimism can create a “positive” cycle, where more traders are willing to enter long positions and bet on price increases.

Grayscale ETHE negative premium narrows

Lumida Wealth CEO Ram Ahluwalia also made a point that the ETH price could recover and reverse losses, possibly even surpassing Bitcoin (BTC).

Ram Ahluwalia noted that the negative premium of Grayscale Investment’s Grayscale Ethereum Trust Fund (ETHE) has been narrowing over the past few months, rising 4% on December 22.

According to Ram Ahluwalia’s analysis, this development suggests that institutional investors choose to buy Grayscale’s ETHE product to gain ETH exposure in a regulated manner. As the negative ETHE premium disappears, marginal traffic is likely to flow to ETH Spot for staking yields. As a result, institutions are unlikely to invest more in ETHEs because the “big gains” have already been accomplished.

According to Stake Rewards, as of December 22, more than 28.6 million ETH have been staked, with a yield of 4.32%, considering the correlation between the staking amount and the yield, the more users who choose to stake physical ETH, the lower the reward rate or yield.

As the negative ETHE premium disappears, institutions or large players transferring funds to ETH through the spot market could drive up the price.

Technical Indicators

Analyst Denys Serhiichuk said that from the ETH price action on the daily chart, the ETH price broke through the resistance level of $2,331 on the hourly chart in the short term. If the day’s Closing Price falls below this level, a further pullback to the $2,300 area is possible.

On the longer time frame, the closing of the $2,392 resistance level needs to be watched. If the upper lead is near or above $2,500, the uptrend may soon continue to the $2,500 area, and in the medium term, closing around $2,400 plays a key role in a further rebound, and if the bulls can take advantage, will continue to test the $2,500-$2,700 area.