Ethereum price analysis points toward a possible upside ahead of the Ether ETF launch, although whale activity signals a possible sell-side pressure. Two large investors have moved as much as 25,865 ETH to centralized exchange wallets over nine days, raising fears that there could be a possible sell-off in the crypto market.
Whales Transfer ETH to Centralized Exchanges
Large-volume holders in ETH have largely anticipated the upcoming launch of the ETF, data from Spot On Chain shows. One of the whales, with the address prefix 0xbec, sent 11,965 ETH valued at around $41.4 million to Binance, and it still held 51,462 ETH valued at around $180 million. Another whale sent 13,900 ETH to OKX, which is approximately $47.6 million in value.
In the 9 days ahead of tomorrow’s #Ethereum ETF launch, two giant whales deposited 25,865 $ETH ($89M) to CEX!
1️⃣ Whale 0xbec moved 11,965 $ETH to #Binance at ~$3,457 ($41.4M) in the past 5 days.
• Last action: 12hrs ago
• Holding: 51,462 $ETH (~$180M)
• Est. profit: $29.9M… pic.twitter.com/q4Cs8LhkX6— Spot On Chain (@spotonchain) July 22, 2024
This whale retains 188,070 ETH, equivalent to about $657 million across two wallets. Such large moves to exchanges are often indicative of selling pressure as investors start to divest their positions. The timing, right before the ETF launch, even gives hints of a possible “sell-the-news” event where the anticipation of the ETF launch bid up prices, while the actual event may trigger a sell-off.
Ethereum ETFs Start Trading
On July 23, Ethereum ETFs are set to start trading, including Franklin Ethereum ETF, 21Shares Core Ethereum ETF, VanEck Ethereum ETF, Fidelity Ethereum Fund, and Invesco Galaxy Ethereum ETF. Being signed off by the SEC allows these ETFs to be able to bring in quite some inflows that may potentially pump the price of Ethereum.
It was launched last week by the Chicago Board Options Exchange, after the Securities and Exchange Commission gave the nod for rule changes that allow several spot Ethereum ETFs to be listed.
To entice investors and be the first-mover advantage, ETF issuers have been offering incentives that include fee waivers and discounts. For instance, analysts noted that the billions in funds could flow into the newly introduced ETFs in the coming months, exerting price pressure on Ethereum toward the $4,000 resistance level.
Technical Analysis and Price Outlook
At the moment, Ethereum tests resistance at $3,500. Any rebound from support at $3,400 is key to maintaining the uptrend. Further support is seen by the Bollinger Bands and the 20-day Exponential Moving Average, which further favors the case for a bullish outlook. Notably, prices of Ethereum have continued to show some resilience, trading above the 100-hourly Simple Moving Average and forming a connecting bullish trend line with support around $3,450 on the hourly chart.
Still, the price faces strong resistance near the $3,550 level and is well below the 100 hourly simple moving average. The key hurdles sit near $3,580 and $3,650. A clear move above $3,650 might set the pace for Ethereum to test the $3,700 resistance and even move further higher. On the downside, the main support levels are forming at $3,500 and $3,470 should it fail to remain higher than the $3,550 hurdle.
Market Sentiments and Investor Behavior
Approval of the Ethereum ETFs has been a moment of thrill for the market; still, the initial price reaction has been quite muted. Post the approval of the ETFs, the price for Ethereum went higher by a mere 2.5%.
A few reasons are important in contributing to this usually toned-down response : prevailing recent market volatility and caution from investors. The cryptocurrency market has experienced turbulence, with its market cap declining from $2.65 trillion to $2.11 trillion in recent months.
Such uncertainty has definitely made the investors cautious, which in turn has impacted the price of Ethereum. Another possible reason is the classic “buy the rumor, sell the news,” where those who bought early are now liquidating their positions, probably preventing a much larger rally in price.
