Ethereum Price Prediction: ETH Surges 20% in a Single Day to Outperform BTC, Will There Be a Second Wave?
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On August 20, Ethereum surged nearly 20% to outperform Bitcoin, driven by U.S. liquidity expansion, favorable political developments, and regulatory easing. This rally was heavily amplified by historically low exchange inventories resulting from locked assets in L2 networks and staking protocols. Despite improved macroeconomic sentiment, the absence of Federal Reserve rate cuts makes an immediate breakthrough past the $2,300 technical resistance unlikely. Sustaining a close above this level could signal a trend reversal and target the next resistance at $2,800, though broader monetary easing remains a key constraint for further upside.
TradingKey - On August 20, Ethereum (ETH) price experienced an explosive rally, surging nearly 20% in a single day to mark its largest single-day gain since May 9, 2025, far outperforming Bitcoin. On the same day, Bitcoin (BTC) rose nearly 10%, briefly touching the $70,000 mark.
ETH and BTC price changes, Source: CoinMarketCap
Why Is the Price of Ethereum Rising?
The core drivers behind Ethereum's price surge originated in the United States, mainly encompassing three aspects: 1. The US Treasury doubled its single bond buyback limit to $4 billion, releasing substantial liquidity; 2. US President Trump met with executives from multiple crypto firms and revealed plans for large-scale Bitcoin accumulation; 3. The US SEC established registration exemption and safe harbor mechanisms through the Crypto Asset Regulations.
ETH's gains far outperformed BTC mainly because a massive amount of ETH is locked in L2 networks, liquid staking, and restaking protocols, leaving exchange spot inventory available for trading at historic lows. When massive buying orders flooded in, the extremely low spot order book depth directly amplified upward price slippage. Data shows that the ETH balance in exchange wallets was only around 12 million tokens on August 20, far below last year's peak level of 17 million tokens.
ETH Exchange Wallet Balance, Source: Coinglass
Will Ethereum Price Rise Further?
Although the macroeconomic environment has improved, greatly benefiting high-beta assets such as BTC and ETH, the US has not engaged in massive monetary easing, and the Federal Reserve signaled no rate cuts in its latest meeting minutes. This makes it unlikely for ETH price to directly break through the current technical resistance level of $2,300, which is the first resistance level at the 0.236 Fibonacci retracement and the first high of the rebound after this year's crash.
However, if the ETH price breaks above and holds firm at this level, it would signal a reversal of the current downtrend and significantly boost bullish market sentiment. The next resistance level lies at $2,800, representing roughly 22% upside potential from current levels.
ETH price chart, Source: TradingView
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
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