The U.S. Securities and Exchange Commission (SEC) has approved eight spot Ethereum ETFs, sparking excitement in the crypto community. Soon after the SEC’s approval, Ethereum’s price showed both volatility and resilience. It dropped sharply from $3,880 to $3,632, a 4.45% decrease. This initial reaction might mirror Bitcoin’s past market behavior, where substantial gains followed short-term drops.
What’s the story for Ethereum from here on? Read to find out.
How Crypto Reacted Today?
Before the U.S. SEC announced its decision on the Ethereum ETF approval, Ethereum’s price experienced considerable volatility. It dropped to $3,500 just before the announcement but surged to nearly $3,900 on unconfirmed approval reports. After confirmation, it settled above $3,800. Interestingly, a whale sold a massive 7,900 ETH holdings valued at $29 million during this tumultuous period.
Despite the good news, Ethereum has seen a significant rally of over 30% in the past week. However, investors are cautious, watching closely to see if this news triggers a “sell-the-news” reaction.
In Comparison with Bitcoin’s ETF Approval
On January 10th, the Bitcoin (BTC) ETF approval marked a significant milestone for the cryptocurrency market. Initially, Bitcoin experienced a 21% price drop over the next 16 days, followed by a remarkable 92% rally, highlighting the market’s volatility and growth potential.
Ethereum Prices Under Sell-Pressure?
Ali Martinez’s analysis of Ethereum provides valuable insights into its current market dynamics. Firstly, he highlighted the increasing deposits of ETH to exchange wallets hinting at a possible upcoming sell-off or profit-taking activity among investors. This is complemented by the Tom DeMark Sequential indicator, which signals a sell opportunity on Ethereum’s daily chart.
However, amidst this selling pressure, IOMAP data shows that over 1.81 million addresses purchased approximately 1.66 million ETH in the price range of $3,820 to $3,700. This zone is expected to act as a crucial support level, potentially preventing substantial price drops. In case this support fails, the next key support levels lie between $3,580 and $3,462.
On the flip side, significant resistance is observed between $3,940 and $4,054, where a considerable number of addresses previously purchased ETH. Breaking through this resistance and closing above $4,170 could invalidate the bearish outlook, paving the way for a potential upward movement toward the $5,000 mark.
Where’s ETH Heading?
With the Ethereum ETFs’ approval, analysts predict there will be over $500 million in new investments, but it may take time to boost prices. On-chain data suggests Ethereum could stabilize above $4,000 and even rally to $5,000-$6,000 by August. The launch of Bitcoin ETFs saw significant institutional investments, raising curiosity about how Ether ETFs could impact institutional adoption.
Will you Sell, Buy, or Hold what’s your strategy in the current scenario? Tell us.
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