Before the ETF debut, Ether regains $3K amid indications of seller exhaustion

  • The elimination of discounts in the Coinbase indicator and the Grayscale Ethereum Trust is encouraging for ether bulls.
  • Ether surged above $3,000 in the course of European market hours.
  • The Coinbase indicator and the Grayscale Ethereum Trust no longer offer discounts.
  • Seller weariness is seen in price charts close to the long-standing $2,800 support level.

Finally exhibiting signs of seller tiredness and a possible bullish rebound, the ether (ETH) market saw a 20% decline in the four weeks leading up to July 5.

The native Ethereum blockchain cryptocurrency rose more than 4% to $3,050 early on Monday, according to CoinDesk data, rebounding from strong support.

The rebound and additional metrics measuring sentiment in the market and demand indicate that the cryptocurrency may have bottomed out ahead of the upcoming release of spot ether ETFs in the United States this month.

Discounts from Grayscale and Coinbase vanish

When compared to Binance, ether is no longer trading at a discount on the Nasdaq-listed Coinbase, indicating seller weariness and a possible price bottom.

From a steep discount of -0.19 at the end of June, the ether premium index of blockchain analytics company CryptoQuant, which gauges the difference between Coinbase’s ETH/USD pair and Binance’s ETH/USDT pair, has rebounded to zero or neutral. The previous discount was a result of significant state-side investor selling pressure.

According to data sources Grayscale and YCharts, the discount to net asset value (NAV) for the Grayscale Ethereum Trust (ETHE) has also subtly vanished for the first time in more than two years, suggesting a rise in investor confidence and demand for ether-related investments.

According to an email from Tagus Capital, the discount has been decreasing from the bottom of the cryptocurrency bad market in December 2022 and, more recently, after the SEC approved 19b-4 forms for spot Ethereum ETFs from several issuers on May 23, 2024.

While the issuers’ S-1 registration statements must still become effective before trading can begin, Tagus Capital noted that the removal of the NAV discount suggests that the SEC is expected to approve Ethereum ETF trading soon, maybe in mid-July.

Several commentators predict that the ETFs would increase investor demand for ether by billions and raise knowledge of Ethereum, the parent blockchain of ether, which is often thought to be more complex than Bitcoin.

According to analyst predictions, inflows into the ETH ETF could equal about 30% of those that occurred at the launch of the BTC ETF. According to the IntoTheBlock weekly email, the first five months of the BTC ETF witnessed net inflows of $5 billion.

Sellers are unable to breach critical support

Although price recoveries are common during bearish trends, ether’s advance above $3,000 is noteworthy since it came after a successful defense of the critical $2,800–$2,850 support zone.

Through the latter part of April and the first part of May, buyers held those levels, proving that they were essential support. It appears that sellers have ran out of steam because long-tailed daily candles have started to develop at the mentioned support since Friday.

A long-tailed candle indicates that buyers eventually gained the upper hand against sellers, who had initially driven the price down to the support. There is therefore a chance that the recovery will continue in the foreseeable future.

On the hourly chart, the double bottom pattern is another indication that bulls should feel confident. The “W”-shaped pattern that appears near the conclusion of a downtrend suggests a possible bullish turnaround and a reduction in selling velocity. It appears that sellers are having difficulty since prices have twice tested and found support at the same level.

Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Puskar Pande

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