Why is Ethereum (ETH) price up today?

Key takeaways:

• Ether’s price rose over 5% to $2,520 on May 20, mirroring similar upward moves across the wider cryptocurrency market.

• Ethereum’s record open interest, rising funding rates and a significant short squeeze fuel the rally.

• A classic recovery pattern suggests a potential 92% rally toward $4,800 as ETH holds key support.

Ether (ETH) price rose by over 5% in the last 24 hours to around $2,520 on May 20 amid increasing futures open interest. 

Data from Cointelegraph Markets Pro and TradingView shows ETH gained as much as 10%, rising to an intraday high of $2,590 on May 20 from a low of $2,350 on May 19. 

Ether price move mirrors marketwide recovery

ETH’s price rise on May 20 mirrors the bullish sentiment in the market that has seen crypto prices recover across the board.

Bitcoin (BTC) has risen 2% over the last 24 hours to trade above $105,000. While other major altcoins such as XRP (XRP) and Solana (SOL) rose by 1.4% and 3.3%, respectively.

Similarly, the total crypto market cap has increased by 2.2% over the last 24 hours to rest at $3.33 trillion at the time of publication.

This performance comes as a positive sentiment remained in the cryptocurrency market despite Moody’s recent downgrade of the US credit score, which saw equities drop and gold extend its downtrend.

Meanwhile, cryptocurrencies have held their ground, with Bitcoin rallying as high as $107,000, producing the highest-ever daily candle close on Sunday, May 18. Ether followed suit, rallying to about $2,600 before retracing. 

“BTC’s ability to rally over the weekend despite a risk-off tone in equities following the Moody’s US credit rating downgrade” particularly stands out, said trading firm QCP Capital in a May 19 Telegram note to investors, adding:

 “This reinforces BTC’s positioning as a legitimate store of value, a narrative that continues to gather momentum and may serve as a long-term catalyst.”

The firm pointed to consistent inflows into crypto investment products and institutional demand as catalysts, even as derivatives markets saw increased investor interest.

Ether short squeeze and record OI boost ETH price

Ether’s bullishness on May 20 is accompanied by significant liquidations in the derivatives market, signaling strong upward pressure.

Over $57.2 million worth of short ETH positions have been liquidated over the last 24 hours, compared to $22 million in long liquidations.

Since May 8, traders betting against Ether have been forced to close their positions, with approximately $913 million in short liquidations recorded, accompanying a 40% rise in price.

At the same time, Ether’s open interest (OI), the total value of outstanding futures contracts, has increased sharply to an all-time high of 20.1 million ETH on May 20 from 11.76 million ETH on May 8. This indicates increased trading activity in the derivatives market. 

Also backing Ether’s upside are positive funding rates in ETH perpetual futures markets. Funding rates represent the periodic payments exchanged between long and short-position holders. This metric has increased to 0.0078% from $0.0012% over the same period.

This rise in open interest shows more traders are entering the market and opening new positions. Higher funding rates indicate that more traders are going long (betting on higher prices) and are willing to pay extra fees to keep those positions open.

Both metrics signal bullish bias among ETH futures traders.

ETH price V-shaped recovery targets all-time highs

Ether’s price has been forming a V-shaped recovery pattern on the weekly chart since December 2024, as shown below.

A V-shaped recovery is a bullish pattern formed when an asset experiences a sharp price increase after a steep decline. It is completed when the price moves up to the resistance at the top of the V formation, also known as the neckline.

ETH appears to be on a similar trajectory and now trades below a supply-demand zone between $2,600 and $2,800, where the 100-day and 50-day simple moving averages (SMAs) sit.

This suggests that bulls need to push the price above this area in order to increase the chances of the price rising to the neckline at $4,100 to complete the V-shaped pattern. Higher than that, the next logical move would be toward the 2021 all-time high of $4,800, representing a 92% increase from the current price.

The relative strength index increased to 52 on May 20 from near oversold conditions at 31 in mid-April, suggesting the bullish momentum is picking up.

Popular crypto analyst Michaell van de Poppe said that the dip below $2,400 on May 19 was an opportunity to accumulate more before Ether’s “next run toward $4,000.”

As Cointelegraph reported, a move to $3,700 is possible in May, citing strong onchain and technical metrics.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.