ETH Recovery In Progress

Ethereum has gained back all its losses from Monday, after working so hard to get back over the $3,000 level at the end of last week. ETH looks to try and lead the blue chip rally on a likely turnaround Tuesday. The market seems to have absorbed the scares that began on Sunday night and went through the day on Monday, ranging from macro out of Japan to domestic DAT moves. Social media is alive with chants of the Santa Rally beginning, and hopes of a strong end to the year are permeating. 

ETH has an upgrade to the network on December 3rd, called Fusaka. Fusaka will increase Ethereum’s scalability at the layer 1 level, bringing more capacity to the network through data availability and higher blob capacity. This will help scalability tremendously, and impact the layer 2’s on Ethereum by making things cheaper for the ecosystem. This unified vision proposed by the Ethereum foundation is actually being accomplished, and is a huge step forward for the network.  Heading into the end of the year with a massive network upgrade could help price action immensely, as this type of positive utility and UX can help bring in more participants, and more capital into the ecosystem.

Ethereum has mixed funding rates this morning, ranging from negative annualized rates approaching -10% on OKX, to nearly 9% on Hyperliquid. Flows are heavy around the money for the end of the year option expiry, 26DEC25, as traders position themselves to benefit from upside price movements while buying puts to protect on the downside. This week will be interesting to see if a new uptrend forms, or the bears take over once again.