UPDATED First Mover: Ether’s Price Rally Above $3.2K Appears Spot-Driven, Boding Well for Further Gains
  Everything you need to make sense of the crypto markets and beyond By the CoinDesk Markets Team Edited by Lawrence Lewitinn, Managing Editor, Global Capital Markets May 3 2021 Sponsored by  (Price data as of May 3 @12:40 UTC) If you were forwarded this newsletter and would like to receive it, sign up here.
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Market Moves by Omkar Godbole  Ether's Price Rally Above $3.2K Appears Spot-Driven, Boding Well for Further Gains
Ether (ETH) has soared above $3,200 less than 12 hours after breaking above the psychological hurdle of $3,000 for the first time ever.
The second-largest cryptocurrency traded at a record price of $3,201 right before press time, taking the year-to-date gain to over 330%, according to CoinDesk 20 data.
Analysts say increased buying the spot market is propelling the native token of Ethereum's blockchain higher.
"Ethereum's funding rates remain flat and went negative early today on FTX," Matthew Dibb, COO, and co-founder of Stack Funds, said. "Our view is that the spot-driven rally for ETH is primarily due to excitement around the impending EIP 1559 upgrade."
The funding rate, calculated and paid every eight hours, refers to the cost of holding long positions in perpetuals (futures with no expiry). A high funding rate implies increased buying in the derivatives market, which doesn't appear to the case with ether right now.  Ether perpetual funding rate (Source: Glassnode) The average funding rate across major exchanges is barely holding above zero at press time, meaning the derivatives segment is far from overheated and the buying pressure is mainly stemming from spot markets.
An overheated derivatives market typically leads to sudden price pullbacks similar to ones seen in January and mid-February after the funding rate reached highs above 0.15%.
According to Swiss-based derivatives data provider Laevitas, the breakout above $3,000 could be long-lasting. "Despite ether flying past $3,000, funding rates are completely flat. So this certainly feels like a sustainable spot-led rally," Laevitas tweeted early Monday.
Some investors look to be betting on a continued rally toward $5,000. Among all the options listed on the dominant crypto exchange Deribit, the most common open position is the $5,000 call, data shared by the options analytics platform Laevitas shows.
 Ether: open interest by strike (Source: Laevitas) The total open interest in the $5,000 call is 69,000 contracts at press time. Of that, 15,970 are due to expire at the end of May and 18,400 at the end of June.
A call option gives the purchaser the right but not the obligation to buy the underlying asset at a predetermined price on or before a specific date. In plain English, a call option is a bullish bet.
The bullish sentiment likely stems from analysts predicting a considerable drop in ether's annual issuance following the EIP 1559 upgrade – a proposal to change Ethereum's fee structure, also known as "Ethereum's scarcity engine" or "ETH's burn mechanism".
That said, the options market currently sees less than a 10% probability of ether ending the second quarter above $5,000, according to data source Skew. The cryptocurrency remains vulnerable to the effects of sharp bitcoin (BTC) price pullbacks.
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Technician's Take by Damanick Dantes Bitcoin Holds Support, Faces Resistance Around $60K Bitcoin (BTC) held support around $56,000 over the weekend and was trading around $58,700 at the time of writing. The next resistance level around $60,000 is within reach.  Hourly bitcoin chart shows support and resistance levels with RSI (Source: TradingView)
Original story found here: Bitcoin Holds Support, Faces Resistance Around $60K
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