While Bitcoin (BTC) is racing from record to record in 2025, Ethereum (ETH) is still far from surpassing its 2021 ATH.
As ETH investors eagerly await the new ATH, one analyst says Ethereum is preparing for a major breakout.
Derive founder Nick Forster noted that Ethereum volatility could increase in April, which could be a sign of a potential breakout despite weak sentiment.
The analyst said that Etheruem volatility is currently near monthly lows, with the 7-day and 30-day maturities at 59% and 45% respectively.
Nick Forster noted that such low levels rarely persist and volatility could start to rise sharply in April.
Forster noted that while volatility in Ethereum remains low, the ETH futures rate is now below the 5% yield on the U.S. Treasury, indicating weak short-term sentiment.
But the analyst said this often leads to price increases because lower futures rates make leveraged positions more attractive and increase demand.
“When forward rates are this low, leveraged positions become more attractive and demand increases. In the following weeks, we usually see sharp price increases.”
Forster said that while investor sentiment may be in favor of Bitcoin in the short term, the Ethereum Foundation’s roadmap, which also includes the Etherealize and Pectra upgrade, could shift institutional interest back to Ethereum in the second half of 2025.
The Derive founder recently predicted that there is a 30% chance that Ethereum will drop below $1,800 by the end of May, but a 19% chance that it will rise above $2,500.
*This is not investment advice.
