ETHUSD rally accelerates as US moves forward with crypto legislation

Ethereum surged over 11% during yesterday’s trading session, easily breaking through the key 3000–3050 range. The rally only lost momentum near the 3400 level, where we’re now seeing a slight pullback. ETHUSD buyers will likely want to at least take a brief pause before testing the early 2025 highs. After a minor correction, the next target for the bulls could be the 3500 level.

Crypto markets are taking their cues from Washington this week as the House of Representatives makes moves on digital asset regulation. After two days of disagreements, conservative Republicans have finally agreed to bring a series of crypto bills to a vote. As part of the compromise, House Speaker Mike Johnson announced that the Federal Reserve would be barred from issuing a central bank digital currency (CBDC).

While these developments are bullish for the entire crypto market, Ethereum has emerged as one of the top performers in terms of price growth. Analysts at Bloomberg attribute this to ETHUSD having far greater upside potential than Bitcoin, which is already trading near its all-time high. According to their reports, traders are now applying the same strategies to Ethereum that they once reserved for the flagship cryptocurrency, suggesting that Ethereum's standing in the investment community is rising.

FxStreet data shows that growing demand for Ethereum is clearly reflected in the derivatives market as well. Open interest for the cryptocurrency has risen by 1.84 million contracts since the beginning of July. That said, the current levels still remain well below late 2024 highs, when ETHUSD was also in a strong uptrend. This suggests that market positioning has yet to reach extreme optimism, meaning the current rally still has room to run.

ETHUSD’s RSI has hit overbought levels on the daily chart, signaling a potential correction. Any dip could present a buying opportunity ahead of an expected surge toward the 3,500 level.

Consider the following trading strategy:

Buy ETHUSD in the range of 3,250–3,350. Take profit – 3,500. Stop loss – 3,050.