Ethereum’s Price Surge at Risk as Trading Activity Drops Amid ETF Optimism

An examination of the price movements of Ethereum in recent times uncovered a notable upsurge during the second week of July. This surge led to a weekly gain of 13.2%, propelling the asset from $2825 to $3196, surpassing the monthly support level.

The resurgence in Ethereum’s price was fueled by market optimism surrounding the potential approval of spot ETH ETFs in the upcoming week, further supported by the supply dynamics of broader market assets. The question on many investors’ minds is whether this correction trend has now run its course.

Analyzing the Ethereum price trends, it is observed that the daily chart indicates a horizontal movement in the mid-term. With a new lower high established at $3974 and a recent formation of a similar swing low at $2815, experts anticipate a consolidation phase for ETH to recuperate from its waning bullish momentum.

Despite the recent uptick to $3191 following a bounce from the $2815 support level, accompanied by a rise in market capitalization to $383.5 billion, the diminishing trading volume suggests a waning enthusiasm among traders to initiate long positions.

The sustainability of this rebound is called into question due to the lack of commitment from buyers, potentially leading to further adjustments in Ethereum’s price. If the coin retraces to the descending overhead trendline, depicted by the downward-sloping blue line, sellers may aim to challenge the $2815 floor, extending the current downtrend.

In a scenario where a breakdown occurs, increased selling pressure could drive Ethereum’s price down to $2400.

Nate Geraci, President of the ETF Store, highlighted the SEC’s cautious approach to spot Ethereum ETF S-1 submissions, drawing parallels to their handling of 19b-4 filings characterized by meticulous scrutiny. Despite the absence of a clear rationale for any delays, Geraci remains optimistic about the imminent approval expected in the following week.

The potential approval of the ETF could inject fresh buying momentum, potentially elevating the price target for ETH beyond the $4000 mark, as reported by Coingape.

In terms of technical indicators:
– EMAs: The 20-day and 50-day Exponential Moving Averages act as dynamic resistance levels during an upward trend, indicating a robust downward momentum.
– RSI: The Relative Strength Index has reverted to 45%, signaling a neutral sentiment among market participants.