Ethereum has failed to overcome key resistance despite bullish sentiment surrounding ETH ETF
- Ethereum ETFs set for $5 billion in net inflows, says Gemini.
- Ethereum Foundation shed its holdings again, bringing its total sales since January to 2,266 ETH.
- Ethereum may decline to $3,378 to target a $3.75 million liquidation pool.
Ethereum (ETH) is down more than 1.4% on Tuesday following another ETH sale from the Ethereum Foundation. Meanwhile, crypto exchange Gemini's recent report reveals that ETH ETF could see about $5 billion in net inflows within six months of launch.
Daily digest market movers: ETH ETF inflows prediction, Ethereum Foundation sheds holdings
In a report on Monday, crypto exchange Gemini predicted that spot Ethereum ETFs could attract a net inflow of $5 billion within their first six months of trading.
When combined with the conversion of Grayscale's Ethereum Trust, Gemini analysts predicted that ETH ETFs would have total assets under management (AUM) of around $13 billion to $15 billion in six months.
The report suggested that if ETH ETFs captured a net inflow of $7.5 billion in six months, it would indicate a "significant upside surprise," while a net inflow of $3 billion would be a disappointment.
Gemini analysts predicted the inflows could trigger a 20% rise in the ETH/BTC ratio to 0.067 from its current lows.
"Given the AUM comparable in international ETF markets, robust on-chain dynamics, and differentiating factors such as a thriving stablecoin environment, there is favorable risk-reward of an ETH catch-up trade in the months to come," said Gemini.
Meanwhile, Bloomberg analyst James Seyffart held onto his earlier estimate that ETH ETFs would only capture about 20-25% of the flows seen in Bitcoin ETFs. He noted that such a move would make ETH ETFs the second most successful ETF category in history behind Bitcoin ETFs.
The Securities & Exchange Commission (SEC) approved 19b-4 filings of spot ETH ETFs in May but needs to greenlight issuers S-1 registration statements before the products can go live in the US.
According to Spot On Chain, the Ethereum Foundation resumed selling ETH on Tuesday after swapping 100 ETH for 343,934 DAI. This adds to a long list of ETH sales — 2,266 ETH worth $6.56 million — the Foundation has made since the beginning of the year.
While the sale seems insignificant, some traders often use the Foundation's move as a proxy for when to shed their holdings.
ETH technical analysis: Ethereum could take slight downturn before rebounding
Ethereum is trading around $3,412, down more than 1% on Tuesday after it failed to move past key resistance at the $3,547 level.
ETH saw a rejection around $3,523, triggering about $14.81 million in long liquidations, according to Coinglass data. On the other hand, short liquidations have slowed down, accounting for only 33% of ETH's total liquidation in the past 24 hours.
ETH may target the $3.75 million liquidation pool at around $3,378 before rebounding. This aligns with ETH's 4-hour chart, which shows that $3,739 is a key support level. IntoTheBlock's data also shows that 3.71 million addresses acquired about 3.33 million ETH around this price.
ETH/USDT 4-hour chart
Zooming out, ETH has to overcome the $3,629 resistance — a price level it had failed to sustain any significant move above in the past three weeks — to give credence to bullish sentiment surrounding the potential spot ETH ETF launch.
The $3,203 serves as a key support on the downside as a potential move below it may spark prevailing bearish sentiment.
Cryptocurrency prices FAQs
Token launches like Arbitrum’s ARB airdrop and Optimism OP influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence risk assets like Bitcoin, mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs. This has been observed in Bitcoin and Litecoin.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi
