Ether Retakes $3K Amid Signs of Seller Exhaustion Before ETF Debut

As a crypto investor, I observed an approximate 4% surge in the value of Ethereum’s native token early on Monday, reaching a price of around $3,050 based on CoinDesk’s data. This uptick came after the token touched crucial support levels.

Based on recent signs of improvement and additional data pointing to market demand and investor confidence, it’s possible that the cryptocurrency has already reached its lowest point before the anticipated launch of US-listed spot Ethereum ETFs later this month.

Let’s discuss those in detail.

Coinbase and Grayscale discounts evaporate

As an analyst, I’ve noticed that Ether is now trading at parity on Nasdaq-listed Coinbase with Binance. This could be indicative of seller exhaustion and potentially mark the end of the downward price trend for Ether.

“The discount between the price of cryptocurrencies and their intrinsic value has been gradually shrinking since the crypto market bottom in December 2022. Notably, this trend has become more pronounced following the SEC’s approval of 19b-4 forms for Ethereum spot ETFs from multiple issuers on May 23, 2024,” Tagus Capital stated in an email.

The elimination of the Nav discount in Ethereum ETFs suggests that SEC approval for trading is anticipated, possibly as early as mid-July, despite the requirement for registration statements to be effective first. (Tagus Capital’s statement paraphrased)

As a seasoned analyst, I’ve noticed that numerous onlookers anticipate that Exchange-Traded Funds (ETFs) will spur substantial investor interest in ether, potentially unlocking vast sums of capital. Furthermore, this influx of investment could significantly elevate the profile and recognition of Ethereum, Ethereum’s intricate nature notwithstanding, when compared to the more familiar Bitcoin.

Sellers fail to penetrate key support

During downturns in the market, price rebounds are common. However, ether’s surge past $3,000 is noteworthy as it came after a strong defense of its critical support level between $2,800 and $2,850.

In the latter part of April and the beginning of May, buyers successfully protected those key levels. These levels have proven to be significant as they have been defended effectively. The appearance of long wick candles on these support levels since last Friday indicates that selling pressure has diminished.

A prolonged dip in candle shape indicates that sellers had the upper hand at first, pushing the price towards a support level. However, buyers ultimately took charge, implying that the price uptrend may persist in the coming days.

As an analyst, I’d like to point out that a double bottom pattern appearing on the hourly chart serves as an encouraging sign for the bullish investors. This particular pattern, resembling the letter “W,” emerges toward the end of a downtrend. It symbolizes decreased selling pressure and potentially signals an imminent reversal in the trend. The fact that prices have been tested twice at the same support level suggests that sellers are experiencing difficulty in pushing the price lower.