Ether has maintained its rally while outperforming bitcoin as market volatility prompts a surge in short ETH -5.94% liquidations.

Ether short positions bore the brunt of market volatility damage as the digital asset rose above the $3,600 mark on Monday. According to Coinglass data, there were over $27 million in ether short liquidations in the past 24 hours. In the wider cryptocurrency market, there have been over $204 million in liquidations over the past 24 hours.

Ether increased by around 1% in the past 24 hours and was changing hands for $3,605 at 4:38 a.m. ET, according to The Block's Price Page. 

The price of ether on Tuesday increased by 1%. Image: The Block.

Bullish factors for ether

According to CoinShares Research Associate Luke Nolan, the news of BlackRock’s tokenized fund on Ethereum last month is a bullish factor that could be a driver of the digital asset in the long term. "This is bullish for Ethereum in the longer term, as the choosing of a public, rather than private, blockchain, and over alternative layer 1s prove that in fact Ethereum's security, liveness guarantees and strong developer base are enough to maintain its position as smart contract platform leader, for now at least," Nolan told The Block.

The analyst also pointed to the ETH/BTC pair, noting that it is currently at multi-year lows. "Ether sentiment is reflecting this: historically, when ether has been a hated asset, it has gone on to outperform bitcoin for a number of weeks or even months. The last few times it has flirted with this level, it has bounced and outperformed by up to 20% in the weeks after," Nolan said.

However, Nolan suggested that the U.S. Securities and Exchange Commission is unlikely to approve a spot ether ETF in May. "We have seen essentially zero dialogue from the SEC and subsequent amendments from issuers, which is certainly a bad sign. The flip side of this is that the market is not really expecting an approval, so it is unlikely to materially weigh on prices should the rejection come," Nolan added.

Wider crypto downturn

In contrast to ether's sustained rally, bitcoin has declined by 1.47% in the past day, falling below the $70,000 mark. Solana has also posted a price correction, falling by 3.62% in the past 24 hours to $175.60 at 4:38 a.m. ET, according to The Block's Prices Page.

The global cryptocurrency market cap today stands at $2.78 trillion, an increase of a muted 0.2% in the last 24 hours. Bitcoin dominance is at 49.9% and ether dominance is at 15.7%. according to Coingecko data.

The GM 30 Index, representing a selection of the top 30 cryptocurrencies, has increased by 1.42% to 151.88 in the past 24 hours.