Ethereum’s 5% Decline May Lead to Rebound Amid $2 Billion ETH Transfer Misinterpretation Fears
Ethereum investors in ETFs are showing strong buying activity, with a notable net inflow of $98.4 million. Contrary to concerns about a potential $2 billion worth of ETH supply flooding the market, EmberCN disputes this claim, stating that such a large supply waiting to enter the market does not exist. The recent decrease in Ethereum’s value could potentially act as a catalyst for a surge to new highs.
The Ethereum ETF market remains active, with significant movements in investments. On Tuesday, there was a net inflow of $98.4 million into Ethereum ETFs, with BlackRock’s ETHA and Fidelity’s FETH receiving $109.9 million and $22.5 million, respectively. Interestingly, Grayscale Ethereum Trust (ETHE) experienced outflows of $39.7 million, marking its lowest outflow since the inception of ETH ETFs. The total net asset value of Ethereum ETFs reached $7.06 billion on Tuesday, positioning ETHA among the top six ETFs launched in 2024, trailing only five Bitcoin ETFs.
Despite initial concerns, it appears that the ETH supply situation is not as alarming as previously suggested. EmberCN clarified that a significant portion of the supposedly looming ETH supply had already been transferred to the defunct exchange Bidesk in 2021 and likely sold. Jump Trading, on the other hand, has resumed selling ETH, redeeming and transferring a substantial amount from Lido. The firm’s ongoing ETH selling spree has been ongoing since July 24, possibly influenced by the Commodity & Futures Trading Commission’s (CFTC) investigations into its crypto division.
In terms of technical analysis, Ethereum’s current price stands at around $2,400, reflecting a more than 5% decline. This decline has triggered $53.56 million in liquidations within the past 24 hours, with both long and short liquidations contributing to this figure. Looking ahead, ETH could potentially experience further declines before rebounding, with a possible target around the $2,000 psychological level. Resistance levels for ETH are anticipated around the $3,250 to $3,300 range, where the 50, 100, and 200-day Simple Moving Averages (SMAs) are converging.
Moreover, indicators such as the Relative Strength Index (RSI) and stochastic oscillator suggest potential buying opportunities for ETH, with historical data indicating consolidation periods followed by rallies when RSI levels have approached current values. However, the validity of this thesis may be challenged if ETH experiences a significant drop below the $2,000 psychological level.
