Ethereum (ETH) took the center stage this week as it successfully defended the crucial $1,600 support level. Recent reports hinting at the possible approval of Ethereum Futures Exchange-Traded Funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) have ignited significant interest in the market. This article explores the potential short-term impact on ETH’s price in light of these developments.
Ethereum ETF Approval Speculation Spurs Price Surge
Ethereum’s price made a swift recovery to approximately $1,700 following a Bloomberg report, citing anonymous sources, that hinted at the SEC’s inclination to approve multiple ETH Futures ETF applications. Among the notable applicants mentioned in the report were industry heavyweights like ProShares, Volatility Shares, Bitwise, and Roundhill.
Ethereum Whales Remain Unmoved Despite Optimism
Nonetheless, on-chain data paints a contrasting picture regarding the response of Ethereum whales to this optimistic news. Whales, characterized by their holdings of 10,000 to 100,000 coins, have continued to divest their assets, even after a modest price rebound following a recent market sell-off.
As depicted by the data, this group of Ethereum whales has been steadily offloading their ETH holdings since mid-July. Their collective reduction amounted to 1.12 million coins between July 14 and August 18, now valued at $1.86 billion, with ETH trading at approximately $1,660. Notably, the trading activities of these whales have exhibited a close correlation with ETH’s price movements.
During this same period, as whale holdings decreased by 4%, ETH’s price witnessed an 18% decline. Nevertheless, should the SEC formally affirm the Bloomberg report, it could potentially sway whales to reconsider their ongoing selling activities.
Ethereum Approaches Oversold Territory
Following a month-long selling spree by whales, Ethereum now appears to be approaching oversold conditions. According to Relative Strength Index (RSI) data, Ethereum’s daily RSI for August 18 registered at 14.
In simpler terms, this indicates that 86% of ETH’s daily price fluctuations over the past two weeks have trended downwards. The RSI assesses the strength and momentum of an asset’s current price trend. A drop below the 30 level from above suggests oversold conditions and the potential for a bullish reversal.
ETH Price Prediction: Bullish Sentiment Resides Above $1,500
With Ethereum’s RSI now deeply entrenched in oversold territory, investors looking to anticipate a bullish turnaround may counteract the ongoing whale selling pressure. The Exchange On-chain Market Depth chart, which offers insights into the distribution of active orders, corroborates this perspective.
As illustrated, strategic crypto traders have positioned buy orders for 50,720 ETH in case the price retraces to $1,500. However, should the prevailing bearish sentiment persist, ETH might test the $1,400 level before any significant recovery.
Conversely, Ethereum bulls may seize the opportunity presented by the reports of Futures ETF approval and embark on an early quest to reclaim the $1,900 milestone. Notably, traders have placed sell orders for 25,380 ETH at the $1,825 price level, indicating potential resistance.
Should ETH effectively breach this resistance, it could pave the way for bullish momentum propelling it towards the coveted $1,900 target.
Disclaimer: This article provides information accurate as of its publication on August 20, 2023. It is for informational purposes only and should not be regarded as financial or investment advice. Readers are advised to consult official sources or financial experts for the latest information and personalised financial guidance.
