Post-Ethereum ETF Analysis: ETH Price Seeks Bottom As Bulls Eye $5,000 Target
25 May 2024 - 9:00AM
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The recent approval of the Ethereum ETF applications by the US
Securities and Exchange Commission (SEC) on Thursday has sparked
speculation on the next price movements for the market’s
second-largest cryptocurrency as the trading launch date
approaches. However, significant transfers of Ethereum (ETH)
to cryptocurrency exchanges have raised concerns about
profit-taking, portfolio rebalancing, and potential market
speculation. Sell-Off Amidst Ethereum ETF Greenlight?
According to crypto analyst Ali Martinez, these developments
coincide with Ethereum founder Jeffrey Wilke transferring 10,000
ETH, valued at approximately $37.38 million, to the cryptocurrency
exchange Kraken. Furthermore, the surge in Ethereum balances
on cryptocurrency exchanges indicates a notable increase in tokens
available for sale. Related Reading: Ready For Liftoff: XRP
Price Primed To Skyrocket Before November The chart below shows
that more than 242,000 ETH have been transferred to cryptocurrency
exchange wallets over the past two weeks, signaling increased
trading activity that can contribute to price volatility.
This trend, coupled with Wilke’s transfer, suggests the possibility
of a sell-off or an increase in profit-taking among market
participants. While industry experts like Anthony Pompliano view
the Ethereum ETF approval as a positive sign for the entire
industry, traders are advised to exercise caution. For Martinez,
the growing number of ETH deposits to exchange wallets implies a
potential market reaction characterized by profit-taking or selling
pressure. Additionally, the analyst notes that the Tom DeMark
(TD) Sequential indicator has presented a sell signal on Ethereum’s
daily chart, indicating the potential for a retracement or a new
downward countdown phase before the upward trend resumes.
Ethereum’s Price Outlook In Focus Diving into the price analysis,
considering the IOMAP (Input-Output Model and Profitability) data,
Martinez highlights that Ethereum has a strong demand zone between
$3,820 and $3,700, where over 1.81 million addresses bought
approximately 1.66 million ETH. This range could provide
support amid increasing selling pressure. However, if this zone
fails to hold, the next key area of support lies between $3,580 and
$3,462, where 3.13 million addresses acquired over 1.50 million
ETH. Related Reading: Bitcoin Disappoints With Fall To $67,000, But
Analyst Says Investors Should Not Be Fazed. Here’s Why On the
upside, Ethereum’s most significant resistance barrier is between
$3,940 and $4,054, with over 1.16 million addresses
purchasing around 574,660 ETH. Martinez suggests that a
daily candlestick close above $4,170 would invalidate the bearish
outlook and potentially trigger a new upward countdown phase, with
a target towards $5,000. As of this writing, ETH’s price is $3,719,
reflecting a 2.5% retracement over the past 24 hours. However,
according to the analyst’s assessment, Ethereum remains within a
crucial demand zone. As the market approaches the launch and
commencement of trading for all eight spot Ethereum ETF
applications by the world’s largest asset managers, the exact
impact on price action is yet to be fully realized. Featured image
from Shutterstock, chart from TradingView.com
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