As a seasoned researcher with extensive experience in the crypto market, I have closely followed the price movements of Ethereum and its competitors, including Solana, since their inception. The recent price crash of Ethereum by 12% since the spot ETF approval on July 23 has left me intrigued, especially when compared to Solana’s mere 1.55% increase during the same period.
12% drop in Ethereum price has been observed since its spot ETF approval on July 23, while Solana, often referred to as an ‘Ethereum rival,’ has only risen by 1.55%. If current trends continue and Solana (SOL) fails to increase its performance, Ethereum is expected to outshine it in the coming days.
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Two Reasons To Anticipate Ethereum Rally
In my previous analysis on Ethereum, I mentioned that Ether’s price movements have been similar to Bitcoin‘s after the ETF announcement. However, it is important to note that the speed at which Ether’s price changes is more pronounced. For instance, while Bitcoin experienced a 21% decrease over a 12-day period, Ether underwent almost a 13% decline in merely three days.
Following the introduction of the ETF, Bitcoin and Ethereum experienced significant outflows from their associated Grayscale products, putting downward pressure on both assets. However, for Ethereum, 10% of the Grayscale Ethereum Trust (ETHE) will be repurposed to support the creation of a mini-spot Ethereum ETF. This conversion is expected to ease substantial selling pressure in the market.
Given that the Bitcoin forecast stays consistent, it’s plausible that the Ethereum price has hit its lowest point and is preparing for an uptrend following the ETF launch.
ETH Supply Shortage
1. The ratio of ETH staked in the ETH 2.0 protocol to the total circulating Ethereum supply currently stands at a record high of 28.1%, indicating a highly optimistic perspective for Ethereum investors.
Approximately 17 million Ethereum tokens are currently being stored on cryptocurrency exchanges, marking a five-month low in such holdings. This decrease in exchange-held ETH further tightens the token’s overall supply.
Previously stated, Grayscale’s outflows are currently leading; consequently, the total net flows as of July 29th amount to $439.64 million. However, as outflows subside and inflows increase, the decreased supply of ETH could unexpectedly boost its price and potentially initiate a powerful surge in value.
1. Overall, if the fundamental aspects of Ether continue to strengthen, it seems improbable that the altcoin will remain at its current cap. If this occurs, the Ethereum price prediction indicates a potential return to the psychologically significant level of $4,000. Once surpassing this mark, ETH could potentially exceed its all-time high (ATH) of $4,878 and reach the $5,000 threshold.
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2024-07-30 17:04