Ethereum beats Mastercard: Explaining ETH’s 20% price surge

• Ethereum’s price soared by 20%, overtaking Mastercard in market cap, amid strong buying pressure.
• SEC’s shift towards likely approval of an ETH ETF has sparked a market rally.

So far, Ethereum [ETH] has experienced a remarkable surge, ascending by nearly 20% in just the past day. This impressive increase pushed Ethereum’s price to exceed $3,600, marking the highest level since 19th April. 

The asset’s volume is also on an uptrend, indicating strong buying pressure in the market. This development comes amid a sign of Ethereum’s growing influence and adoption, underscoring its position as the second-largest cryptocurrency by market capitalization.

Leon Waidmaqnn, a noted on-chain analyst, has pointed out that Ethereum’s market capitalization has now surpassed that of the global payments giant Mastercard, standing at $440 billion compared to Mastercard’s $427 billion.

This shift is not just a reflection of Ethereum’s growing prominence but also a sign of the broader acceptance and integration of cryptocurrencies into mainstream finance.

Regulatory changes and market dynamics

The recent upswing in Ethereum’s market value follows a significant development in the regulatory landscape. The US Securities and Exchange Commission (SEC) has shown signs of a positive shift regarding the approval of spot Ethereum exchange-traded fund (ETF) applications. 

Bloomberg analysts have notably revised their approval probabilities for an Ethereum ETF from 25% to 75%. This change is based on indications that the SEC is rapidly altering its stance, with exchanges being prompted to update their 19b-4 filings in preparation for a potential approval as early as 22nd May.

The regulatory pivot appears to be a key driver behind the current bullish momentum in Ethereum’s market.

Meanwhile, the increase in Ethereum’s circulating supply from 119.6 million ETH in mid-April to 119.73 million ETH at press time, according to data from Glassnode, suggests more tokens are available for trading and transactions. 

Although this could typically indicate increased selling pressure, the current market dynamics show that demand remains robust, likely fueled by the current anticipation of the ETH spot ETF approval.

Source: Glassnode

Market response and future outlook

Amid these developments, Ethereum has not only surged in price but also shown significant movements in other market metrics.

For example, the total value staked in Ethereum has also risen from 43 million ETH last month to over 44 million ETH, according to Glassnode.

This increase in staked ETH underscores the growing confidence of investors in Ethereum’s long-term value and utility.

Source: Glassnode

However, not all market participants are benefiting from this rise. Coinglass data revealed over $10 million in liquidations in the Ethereum market over the past 24 hours, with short sellers bearing the brunt of these losses. 

This follows a larger trend of short position liquidations worth over $80 million the previous day, indicating that many who bet against Ethereum were caught off-guard by its rapid ascent.

Source: Coinglass

Looking at Ethereum’s price chart, the asset appears poised for further gains.

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It has recently broken through a consolidation zone to the upside, a technical pattern that suggests buyers are firmly in control. 

Source: TradingView

This breakout, combined with positive regulatory developments and robust market metrics, sets the stage for potential continued upward movement in ETH’s price.