Ethereum (ETH) appears to have found a powerful ally in World Liberty Financial (WLFI), a decentralized finance (DeFi) platform reportedly linked to U.S. President Donald Trump.
In a buying spree just hours before Trump’s inauguration ceremony, WLFI acquired $48 million worth of ETH, drawing renewed attention to the cryptocurrency.
The acquisition comes at a critical time when Ethereum is striving to overcome a period of underperformance, potentially marking a significant turning point in its trajectory.
Amid this surge in activity, market watchers are speculating on where Ethereum might head next as it rides a wave of renewed momentum.
At press time, Ethereum is trading at $3,299.17, reflecting a 24-hour loss of 0.65%. However, on a weekly basis, the token has gained 2.8%, hinting at growing investor optimism.
AI predicts Ethereum price amid WLFI buying spree
To evaluate Ethereum’s potential trajectory, Finbold analyzed market trends and leveraged insights from OpenAI’s ChatGPT-4o model to provide a clearer picture of what lies ahead for the cryptocurrency.
According to a recent Finbold research, ChatGPT is the most searched AI tool on Google, increasing its relevancy.
The AI model suggests Ethereum could climb to $3,750 by the end of Q1 2025 in a bullish scenario driven by strong market momentum. However, in a bearish case marked by macroeconomic headwinds or tightening liquidity, the price could retreat to $3,000.
Factors driving Ethereum’s price
World Liberty Financial has emerged as a key catalyst for Ethereum’s recent momentum.
On January 20, WLFI acquired 14,403 ETH worth $48 million, increasing its total holdings to 58,853 ETH, according to Arkham Intelligence.
The platform also made a significant move across other assets, purchasing $109 million in digital currencies, including 177.26 Wrapped Bitcoin (WBTC) worth approximately $18.8 million in just hours.
Adding to this bullish outlook, WLFI staked nearly 5,000 ETH, worth over $15 million, through Lido, signaling its long-term commitment to the Ethereum ecosystem.
Derivatives data: A mixed bag
Despite WLFI’s aggressive buying spree, Ethereum’s derivatives data paints a mixed picture. Long/short ratios on platforms like Binance point to strong bullish sentiment among traders, with options open interest climbing 1.85% to $8.18 billion.
However, the market shows signs of reduced activity, with trading volume dropping by 43.13% to $62.05 billion and open interest slightly declining by 0.48% to $31.35 billion.
Additionally, liquidations over the past 24 hours, totaling $44.34 million in longs and $15.75 million in shorts, reflect a market that remains cautious, with recent movements favoring a reset in overleveraged positions.
This combination of optimism and reduced activity suggests that while traders show confidence, broader participation, and higher volumes are needed to sustain a bullish narrative.
Meanwhile, technical analysis indicates a bullish outlook, with Ethereum forming an inverse head-and-shoulders pattern, a classic signal for a potential breakout.
Adding to this, Michael Saylor, the executive chairman of MicroStrategy and a prominent Bitcoin advocate recently admitted to being wrong about Ethereum’s value proposition a statement that further fuels interest in the cryptocurrency.
Ethereum price outlook
Amid this backdrop, artificial intelligence models predict Ethereum could hit $3,750 by the end of Q1 2025, supported by WLFI’s sustained market activity.
However, the model emphasizes the importance of increased trading volumes and broader market participation to maintain bullish momentum.
Conversely, in a bearish scenario marked by macroeconomic headwinds or reduced liquidity, Ethereum could retrace to $3,000.
If WLFI’s activities inspire broader institutional adoption, Ethereum may be poised for a significant rally, with $3,750 as a near-term target. For now, market participants will closely watch whether Ethereum can capitalize on its newfound momentum.
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