Ether Rallies to $3.6K as Bitcoin Holds Steady at $71K

• Ether rallied in the early morning of East Asia's trading day, outperforming the CoinDesk 20 Index.
• Ether's performance seems to be based on market interest in new DeFi protocol Ethena, versus an anticipation of a spot ether ETF approval

Ether (ETH) prices rallied during the early hours of the East Asia trading day while Bitcoin (BTC) remained relatively stable.

According to CoinDesk Indicies data, ether prices rose to $3600, while bitcoin was in stasis around $71,000.

The CoinDesk 20, a measure of the world's most liquid digital assets, was up 3.5% and trading above 2,600. Decentralized liquid staking protocols like Lido DAO and Rocket Pool ETH also saw their tokens push well into the green, up 10% and 8%, respectively, according to CoinGecko data.

ETH's bitcoin-bearing performance could be attributed to continued market interest in decentralized finance (DeFi) protocol Ethena, which has seen its total value locked (TVL) cross the $2.2 billion mark over the last few days after crossing $2 billion on April 6.

Ethena's USDe synthetic stablecoin recently added bitcoin as collateral, CoinDesk reported.

This may be purely a rally based on token demand rather than the hope of an ether spot exchange-traded fund being approved in the near future.

Bettors on Polymarket see a 16% chance of a spot ether ETF being approved in the U.S. by the end of May and only a 45% chance of it being approved by the end of June.

Some traders were positioned for bitcoin leadership after the ether-bitcoin ratio dipped below key support last week. As such, ETH's market-beating rise has brought rapid adjustment in market positioning, leading to a sharp uptick in the perpetual funding rates or cost of holding long/short positions, Singapore-based QCP capital explained in a note on Telegram. The upside volatility has also led to a significant short covering in ETH front-end call options.

"Last Friday, we speculated a possible leg higher, and we expected the move to be led by BTC," QCP wrote. "We were wrong about the leader, as this move has been very much led by ETH."