Sharing a statistically significant correlation with the leading coin Bitcoin [BTC], whose price has rallied above $40,000, Ethereums [ETH] price has climbed to an 18-month high.

On the 4th of December, BTC briefly traded above the $42,000 price mark for the first time since April 2022.

This positive sentiment undoubtedly spilled over into the ETH market, as the altcoin exchanged hands at a high of $2,250 on the same day, a price level it last recorded in May 2022.

Apart from its price rally, ETHs Open Interest has also risen significantly in the past few days. By the 4th of December, this had grown to over $4.5 billion, representing its highest level since February 2023.

Rising Open Interest alongside rising prices suggested that new money was coming into the market, fueling the bullish momentum. This signaled that the upward trend was likely to continue.

However, with price volatility making a gradual comeback, the rally might be short-lived, as traders increasingly occupied leveraged positions.

ETHs Bollinger Bands indicator (BB), assessed on a daily chart, confirmed the possibility of significant price swings soon. At press time, the altcoins price traded above the upper band of this indicator.

Likewise, the gap between the upper and lower bands of the BB indicator has widened consistently since the 30th of November.

A gradual widening of these bands typically indicated an increase in market volatility. The coins Bollinger Bandwidth, which has grown since then, confirmed the rising volatility.

Due to the recent price surge, ETHs estimated leverage ratio has risen. This indicated that, at press time, traders were borrowing more money to trade the leading crypto asset.

ETHs climbing leverage ratio is often seen as a bullish signal. Notably, it suggests that traders are confident that the coins price will continue to rise.

However, it is also risky, as traders with high leverage are more vulnerable to liquidations if the market moves against them.

Realistic or not, heres ETHs market cap in BTCs terms

AMBCrypto found that ETHs funding rates have been only positive since the October rally, meaning that traders have continuously opened trade positions in expectation of a price rally.

However, with the market approaching an overheated region, a drawback might result in the liquidation of some of these positions.

Continued here:

Will Ethereums price prediction piggyback on Bitcoins rise? - AMBCrypto English