Ethereum Rallies Ahead of Spot ETF Launch, But Can It Break Past $4,000?

Ethereum (ETH) has experienced a rollercoaster ride in recent days. While the regulatory green light for spot Ethereum exchange-traded funds

Arslan Butt•Friday, July 19, 2024•1 min read

Ethereum Rallies Ahead of Spot ETF Launch, But Can It Break Past $4,000?

Ethereum (ETH) has experienced a rollercoaster ride in recent days. While the regulatory green light for spot Ethereum exchange-traded funds (ETFs) ignited a wave of optimism, the cryptocurrency’s price has struggled to sustain the initial surge.

The digital asset rallied by 12.5% between July 12 and 15, briefly touching the $3,500 resistance level before undergoing a correction. This price action underscores the complex interplay of bullish sentiment fueled by the ETF approvals and broader market uncertainties.

A Tug-of-War Between Bullish and Bearish Forces

Despite the SEC’s approval of multiple spot Ethereum ETFs, scheduled to launch on July 23, the cryptocurrency’s derivatives market has exhibited a surprising lack of enthusiasm. This disconnect between the potential influx of institutional capital and trader sentiment is puzzling, given the asset’s historical performance following significant regulatory milestones.

While Ethereum’s underlying network continues to thrive, with DApps volume surging and the layer-2 ecosystem expanding, macroeconomic headwinds are casting a shadow over the market. The specter of persistent inflation and the possibility of a cooling US labor market have raised concerns about the Federal Reserve’s monetary policy trajectory.

ETH/USD Technical Analysis: A Battle for Dominance

Ethereum’s price action has been characterized by volatility, with the asset trading in a range between $3,300 and $3,500. The $3,400 level has emerged as a pivotal support and resistance zone, indicating a battle between bullish and bearish forces.

A sustained break above $3,500 could signal a renewed uptrend, potentially leading to a retest of the November 2021 high of $4,868. However, a failure to hold the $3,400 level could trigger a deeper correction, with potential support levels at $3,300 and $3,200.

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ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.