BitMEX co-founder predicts Ethereum will reach $5,000

“I sold SOL and bought more ETH, ETH = $5,000.”

Written by: Mary Liu, BitpushNews

While other cryptocurrencies such as Solana (SOL) and Cardano (ADA) have performed strongly, Ethereum (ETH) has been relatively lackluster and has yet to break above the $2,500 mark.

However, BitMEX co-founder Arthur Hayes optimistically predicts that Ethereum may soon reach an all-time high. “I sold 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. This prediction has proven to be quite accurate, and SOL recently rebounded to $99.6.

As of this writing, Ethereum is trading at $2,270, down 2.7% in 24 hours.

Surge in funding rates hints at key $2,500 level

Ethereum funding rates have increased significantly recently, indicating that traders are generally expecting further gains, with a target of $2,500. Data from crypto derivatives tracker Coinglass shows that the ETH financing rate surged to 0.045%. Indicates that traders tend to be bullish on the asset and are willing to pay a premium to hold a long position. This optimism can create a “positive” cycle, with more traders willing to enter long positions, betting that prices will rise.

Grayscale ETHE negative premium narrowing

Ram Ahluwalia, CEO of Lumida Wealth, also put forward a view that ETH price could recover and reverse losses, possibly even surpassing Bitcoin (BTC).

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

According to analysis by Ram Ahluwalia, this development indicates that institutional investors are choosing to purchase Grayscale’s ETHE product to gain exposure to ETH in a regulated manner. As the negative ETHE premium disappears, marginal flow is likely to flow to ETH spot to obtain staking benefits. Therefore, institutions are unlikely to invest more money in ETHE because the “big gain” has already been completed.

According to data from Stake Rewards, as of December 22, more than 28.6 million ETH have been pledged, with a yield of 4.32%. Considering the correlation between the pledge amount and the yield, the more users choose to pledge physical ETH, the higher the reward rate. Or the yield will be lower.

As the negative ETHE premium disappears, institutions or large players move funds into ETH via the spot market, potentially driving up the price.

Technical indicators

Analyst Denys Serhiichuk said that judging from the ETH price trend on the daily chart, ETH price broke through the resistance level of $2,331 on the hourly chart in the short term. If the day closes below this level, a further pullback towards the $2,300 area is possible.

On the longer time frame, a close at the $2,392 resistance level will need to be watched. If the upper lead is near or above $2,500, the uptrend may continue towards the $2,500 area soon. In the medium term, a close near $2,400 plays a key role in further rebound, which will continue to be tested if the bulls can gain the upper hand. $2,500-$2,700 area.