Ether’s price could be on track to reach a new all-time high with the launch of ETH ETFs
Title: Ether’s Price Poised to Reach New All-Time High with Launch of First Spot Ether ETFs
Summary: The launch of the first spot Ether exchange-traded funds (ETFs) in the United States next week could propel Ether’s price to a new all-time high. Industry experts cite factors such as Ether’s low inflation rate, decreased selling pressure from stakers, and significant withdrawals from exchanges as indicators of a potential rally. However, resistance at $3,500 and the need for a cooling-off period suggest that a sustained rally may follow an initial sell-the-news event post-ETF launch.
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As the cryptocurrency market gears up for the launch of the first spot Ether exchange-traded funds (ETFs) in the United States next week, industry experts are optimistic about Ether’s price potential. Matt Hougan, chief investment officer of Bitwise, believes that Ether (ETH) could be on track to reach a new all-time high, citing several key factors.
One of the main reasons for the bullish outlook on Ether is its low inflation rate. According to Hougan, Ethereum’s inflation rate over the past year has been exactly 0%, creating a favorable supply-demand dynamic for investors. Additionally, Ether stakers are not selling their holdings at the same rate as Bitcoin miners, further reducing selling pressure on the market. Furthermore, with 28% of Ether supply already out of circulation, there is a limited amount of available supply, potentially driving up demand.
In a blog post on July 16, Hougan highlighted the positive impact of increased activity on the Ethereum network on Ether’s price, stating, “Significant new demand meets 0% new supply? I like that math.” He emphasized that as activity on the Ethereum network increases, so does the amount of Ether being consumed, creating organic demand for the cryptocurrency.
Crypto analyst Leon Waidmann also pointed to significant withdrawals of Ether from centralized exchanges, totaling $126 million in a single week. This massive accumulation of Ether ahead of the ETF launch signals strong investor interest in the cryptocurrency, potentially setting the stage for a major rally.
Despite the positive sentiment surrounding Ether, there are still challenges ahead. Ether futures suggest limited confidence in the cryptocurrency breaking above the $4,000 mark in the short term, with $3,500 remaining a formidable resistance level. Additionally, Ether’s relative strength index (RSI) indicates that the cryptocurrency may need to cool down before embarking on a sustained rally. The RSI, a popular momentum indicator, currently sits at 58 on the daily chart, suggesting that Ether is trading above its fair value but is not yet overbought.
Looking ahead, some analysts anticipate a sell-the-news event following the initial ETF launch, which could temporarily dampen Ether’s price before a sustained rally ensues. Alvin Kan, chief operating officer of Bitget Wallet, expects a short-term price jump followed by selling pressure as investors take profits. However, Kan believes that once this initial shakeout is over, Ether’s price could start climbing steadily each month, depending on the daily inflows into the new Ether spot ETF.
Overall, the launch of Ether ETFs is expected to have broader implications for the altcoin market, with some analysts predicting a new altcoin bull market cycle. Popular crypto trader Mikybull anticipates that the ETFs will catalyze a massive rally, sparking a significant altcoin season in the current cycle.
While Ether’s price has already rallied over 11% in the past week, it is still trading 29% below its previous all-time high of $4,890 reached in November 2021. With the launch of the first spot Ether ETFs on the horizon, investors are eagerly watching to see if Ether can break through resistance levels and reach new highs in the coming weeks.
Disclaimer: This article does not provide investment advice. Readers are encouraged to conduct their own research before making investment decisions.
