Ethereum has climbed to its highest level in months as sentiment across the cryptocurrency industry strengthens, with spot ETF inflows and bullish technical signals underpinning the advance.

ETH peaked at $2,548, its highest level since January this year, marking a gain of about 70% from its lowest point of the year. The rally may continue in the coming months, helped by ongoing ETF inflows, with data showing that spot Ethereum ETFs added $697 million this week. Those funds, which began trading in the United States in July 2024, let traditional investors gain exposure to ETH without holding the token directly, which is why their weekly flows are tracked as a demand signal for the asset.

Technical Analysis Points to a Golden Cross

On the daily chart, ETH has risen from its year-to-date low of $1,514 in June to a high of $2,548, moving slightly above the important resistance level of $2,420 — its highest swing in April this year.

A closer look shows that the token has formed a golden cross pattern, which appears when the 50-day and 200-day Weighted Moving Averages (WMA) cross each other. This pattern normally confirms a bullish breakout over time.

The Relative Strength Index (RSI) has continued rising and now sits in overbought territory at 78, a reading taken as a sign that the token is gaining momentum. On that basis, ETH is seen as likely to continue rising in the coming days or weeks, with the next key target to watch at $3,000, about 25% above the current level. On the flip side, a drop below the support level of $2,000 would invalidate the bullish outlook.

Broader Crypto Rally Drives the Move

The main catalyst for Ethereum's rally is the wider cryptocurrency market advance that started earlier this week. Bitcoin has jumped to $77,000, while top tokens such as XRP, Solana, and BNB have climbed by double digits in the last few months.

The rally was triggered by a decision by the Treasury Department to intervene in the bond market after the 30-year bond yield rose to its highest level in more than two decades. The department announced that it was increasing its buyback, which drove the yield down sharply before it bounced back.

That intervention generated substantial demand for alternative assets, including gold and silver. Spot ETH ETF inflows reflected the shift, jumping by $697 million this week.

ETH is also rising as investors react to ongoing risk-on sentiment, evidenced by the Crypto Fear and Greed Index climbing into the greed zone at 76, its highest level in months. The index condenses market inputs such as volatility, trading volume and momentum into a single 0-to-100 sentiment score. In most cases, cryptocurrencies perform well when the index is in an uptrend.

Whales Accumulate as Demand Surges

There are signs that whales have been accumulating Ethereum through a well-timed dollar-cost averaging (DCA) approach. One of these whales is Tom Lee, the Fundstrat co-founder and longtime market strategist, whose BitMine has bought nearly 6 million ETH coins in the last 12 months. He intends to hold these coins for the foreseeable future and earn staking revenue in the process. That revenue stream exists because Ethereum has run on a proof-of-stake system since its Merge upgrade in September 2022, rewarding holders who lock up their coins to help secure the network.

These activities have produced a surge in Ethereum demand. CoinMarketCap data shows that 24-hour volume has soared by 10% to more than $33 billion. The same trend has appeared in the futures market, where open interest — the total value of outstanding futures contracts — has jumped to over $30 billion, its highest level since May. Soaring open interest alongside a rising funding rate is read as a sign of growing demand.

The trend likely explains why the amount of ETH held on exchanges has continued to fall this month, dropping to 12 million coins, far below last July's high of 17.7 million. Falling exchange balances are viewed as a sign that investors are moving their coins from exchanges to self-custody.

Risk to Watch

The main risk Ethereum faces today is that the ongoing rebound proves to be a dead-cat bounce (DCB) — a situation in which assets jump sharply and then resume their downward trend. The $2,000 support level and the weekly pace of spot ETF inflows are the two indicators analysts track to judge which scenario is unfolding.