Ether’s price beat most of the crypto market on Feb. 13, with 3% daily gains to trade above $2,600.

In comparison, the total crypto market capitalization is up 1.3% over the last 24 hours to reach $3.23 trillion at the time of writing.

Ether’s outperformance today can be attributed to several factors, including:

• ETH price rebounds as asset manager 21Shares plans to add staking to its spot Ether ETF.
• The wipeout of overleveraged short positions in the ETH futures market.
• Ether’s oversold conditions project a recovery above $3,000.

Cboe BZX files for staking in the 21Shares Ethereum ETF 

Ether price gains today are largely driven by Cboe filing for SEC approval to allow staking in the 21Shares Ethereum exchange-traded fund (ETF).

Key takeaways:

• The Cboe BZX Exchange is seeking SEC approval to introduce staking for the 21Shares Core Ethereum ETF.
• In Form 19b-4 proposing allowing the staking of Ether, the exchange said:

“Based on discussions with the Sponsor, the Exchange proposes to amend several portions of the Eth ETP Amendment No. 2, as amended, in order to allow the staking of the Ethereum held by the Trust.”

• This filing, if approved, would mark a pioneering move in the US, making it the first ETF to offer staking rewards, according to Bloomberg’s James Seyffart.

• The SEC approved the 21Shares Core Ethereum ETF last year in addition to BlackRock and Fidelity.
• Many firms removed staking from their registration statements before the agency’s approval.
• The SEC, under Gary Gensler, had previously said proof-of-stake tokens are securities.
• The potential to stake ETH through an ETF framework introduces a new utility layer for institutional investors.
• This potentially attracts more significant investments from institutions wary of the operational complexities of direct staking.
• This development has sparked optimism among investors, seeing it as a step toward mainstream adoption and increased demand for Ethereum.

Short liquidations boost ETH price upward

ETH price surge appears to be partly fueled by activity in the futures market, where traders betting on lower prices (short positions) faced higher liquidations than those betting on higher prices (long positions).

• The ETH futures market has recorded $37 million in short liquidations since Feb. 12, compared to $29 million in long liquidations.
• This liquidation imbalance highlights the potential role of a short squeeze in driving Ether’s price higher.

• A short squeeze occurs when traders who bet on a price decline are forced to exit their positions by buying back the asset at higher prices.
• The scale of these liquidations mirrors the period between Jan. 14 and Jan. 15, when $68 million in short ETH positions were wiped out, accompanying an 11% price rise to $3,500.

Ether price could soon recover to $3K — analysts

From a technical perspective, Ether’s oversold conditions suggest a potential rebound to $3,000 in the near term, according to 10x Research analysts.

• The relative strength index has dropped to 36, “a level where past corrections have slowed.”
• In a Feb. 11 post on X, the analysts said that Ether  has been more volatile this cycle, presenting “high-risk, high-reward buying opportunities around key events.”

“History shows that when sentiment turns overwhelmingly negative, [buying] opportunities can emerge.”

• The RSI was at the same level in August 2023 and August 2024, each preceding approximately 80% rallies in price.
• If the same scenario repeats, ETH price should rise above $3,000.
• Fellow analyst HCR shares similar sentiments, arguing that Ether’s “RSI is showing a bullish divergence” and high volume would confirm a breakout above a descending trendline.

“The $2900 target makes sense, shorts getting squeezed will accelerate the move.”

• The ETH support zone to watch for a rebound is right above $2,600, according to the liquidation heatmap from CoinGlass.
• If ETH turns $3,000 as support, it could rally toward the Dec. 16 range high of $4,100, or 50% gains from current levels.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.