Ethereum Surges Alongside Launch of Volatility Shares 2x ETH Futures ETF

Ethereum (ETH) struggled to break through a key resistance level as it continued its sideways movement on Thursday. Concurrently, the newly launched Volatility Shares 2x Ether Futures ETF, known as ETHU, experienced significant growth on its second day of trading.

ETHU’s trading volume tripled on its second day, reaching $15 million, following an initial $5 million in trading volume on its first day. This impressive performance was noted by Bloomberg analyst Eric Balchunas, who pointed out that ETF volumes often decrease after the initial trading day.

The success of ETHU can be attributed to the anticipation of spot ETH ETFs after the SEC approved issuers’ 19b-4 filings on May 23. This development has generated interest and activity within the Ethereum ecosystem.

According to reports from Bitwise, the Ethereum ecosystem has seen a significant uptick in users, with an average daily growth of 2.25 million users in Q1 2024, representing a 55% increase from the previous quarter. The Base ecosystem alone has accumulated over 7 million users since January.

Despite the March Dencun upgrade resulting in lowered gas fees, Ethereum Layer 1 has outperformed Layer 2 solutions and Solana in terms of total fees, with Ethereum Layer 1 fees amounting to approximately $5.66 million compared to $1.74 million from Layer 2 solutions and Solana combined.

As of Thursday, Ethereum was trading around $3,840, with long traders leading in liquidations. According to Coinglass data, ETH liquidations in the past 24 hours have reached $25.95 million, with long liquidations totaling $14.63 million and short liquidations at $11.32 million.

The Ethereum price was rejected at the $3,900 level on Wednesday after a minor increase. To push higher, Ethereum needs to surpass this level and target the $4,093 price level.

The bullish thesis for Ethereum remains intact as long as the price does not sustain below $3,618 for an extended period. Should Ethereum breach this level, it may find support in the $3,301 to $3,600 range to fill the liquidity void from March 20 and 21.