Ethereum spot ETFs have been launched for 7 days, but ETH fails to capture the market's attention. In a time of year that is unfavorable for the crypto market, what will be the impact of the US central bank and its key rates on risk assets, and particularly on Ether?
It is Thursday, August 1, 2024, and the ETH price is hovering around $3,200.
Yesterday evening, Fed Chairman Jerome Powell delivered his monetary policy decision, indicating that he was leaving interest rates unchanged. In his speech, he opened the door to a rate cut in September provided that inflation accelerates its decline and the labor market continues to show signs of weakness.
This is a more favorable framework for risky assets (including cryptocurrencies, therefore) that could start in the coming weeks if the macroeconomic figures for the next 2 months confirm the pattern drawn by Jerome Powell. Until then, continuing to work the current ranges remains the most likely scenario in a period where the seasonality of the months of August and September is historically unfavorable to a possible increase.
Assuming that the end of the year is more positive for cryptos, driven by macroeconomic and political factors, these next 2 months could offer the last interesting buying opportunities in 2024.
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Ether weak as sales slow on spot ETFs
Pairs with Ethereum | 24 hours | 7 days | 1 month |
Ethereum/USDT | -4.40% | 0.00% | -7.60% |
Ethereum/Bitcoin | -1.70% | -0.20% | -10.30% |
👉 How to easily buy Ethereum (ETH) in 2024?
Ethereum’s relative strength has weakened significantly since the launch of Ethereum spot ETFs in the United States. On the charts, the middle of the ETH vs. BTC bearish channel and the range equilibrium against altcoins are both reacting favorably on a daily basis. This reaction could be only temporary, registering a continuation of the bearish trend with a new high lower than the previous one.
To initiate a potential reversal on support, price action must draw a higher low than the previous one and reclaim the area above the January 2024 consensus. Otherwise, prices could embark on a quest to explore the May 2024 lows.
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This reaction on the relative strength of ETH against BTC is taking place in a context where sales on Grayscale's ETHE product are slowing down linearly, going from around $500 million on the day of its launch to an average of $300 million per day, even approaching $130 million over the last 2 days.
These sales are not, however, sustainably absorbed by the other Ethereum spot ETFs, which nevertheless remain harmoniously positive. Let us recall that it took 10 days on the Bitcoin spot ETFs to sustainably absorb the sales on the Grayscale investment vehicle. For comparison, we are on the 7th trading day for the ETH spot ETFs.
Ethereum vs Bitcoin Daily Chart
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ETH, failure at $3,400!
Ethereum confirms a reintegration below $3,400 in weekly closing but also in monthly closing. The asset thus switches to a negative polarity that can only be reversed by reconquering this level for a potential return to around $3,800.
ETH nevertheless maintains a close above $3,245, thus remaining in the body of the previous weekly candle. This is one of the objectives to maintain at the close on Sunday evening for the bullish camp. Otherwise, the lower levels could be retested: $3,000 initially, then $2,800.
In case of a new low, ETH would enter a medium-term downtrend and could target the $2000-$2400 area.
As a final support, guaranteeing a potential medium-term bullish recovery, the confluence between the 50-week moving average and the lower Bollinger band around $2,700 could offer convincing support.
ETH Price Chart Weekly
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In summary, Ethereum’s ETH remains weak against the rest of the market, although it appears to be able to hold on to dominance supports. A rebound in its relative strength could rely on stabilizing buying and selling forces within spot ETFs. Technically, the reintegration below $3,400 shifts the asset into a negative polarity, forcing market participants to watch for the next support levels.
So, do you think ETH can outperform the crypto market again? Please feel free to give us your opinion in the comments.
Have a great day and we'll see you next week for another technical analysis of Ethereum.
Sources: TradingView, Coinglass, GlassnodeETF
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