As a seasoned crypto investor with several years of experience under my belt, I’ve seen my fair share of market fluctuations and regulatory developments. The launch of Ethereum ETFs was a much-anticipated event for many in the community, including myself. However, three days after the launch, it seems that the price of Ethereum remains unaffected, while meme coins continue to thrive.
The price of Ethereum has been subdued for the past three days following its ETF launch, while meme coins have experienced significant growth with exponential YTD gains. Analyzing the ETF data reveals that BlackRock’s ETHA product experienced modest inflows of $17.2 million on its debut trading day.
During the second day of trading, Grayscale experienced withdrawals amounting to a total net loss of $29.2 million for its ETFs. Simultaneously, Ethereum’s price rose by 2.6% to hit $3,247, while Bitcoin regained its value and reached $67,000.
ETF Anticipation Fails to Boost Ethereum Price
On July 23, the long-anticipated Ethereum Exchange-Traded Funds (ETFs) debuted, recording a massive trading volume of $1.11 billion on their inaugural day. The net inflow for this day amounted to $107 million, but turned negative the next day. In contrast, Bitcoin ETFs experienced approximately $4.6 billion in total trading volume during their initial day of trading.
The Ethereum ETF’s approval marks a significant milestone in the crypto sector, with no previous instances of two crypto-based ETFs being approved. This development has fueled increased anticipation for additional ETFs, with a Solana ETF being a strong contender based on filings submitted by VanEck and 21Shares (Form 19-4bs).
Despite the significant news, the Ethereum price decreased due to the prevailing market sentiment.
If the #ETH Spot ETF is so bullish, then why does the price of ETH go down?
As a researcher investigating exchange-traded funds (ETFs) based on Ethereum (ETH), I’ve come across some important information that I believe warrants sharing. These ETH ETFs are not designed for long-term holding, contrary to what one might expect. Instead, they cater primarily to short-term traders. Moreover, these ETFs do not stake the Ethereum themselves, meaning they cannot distribute dividends to their investors. Therefore, I strongly advise against investing in these ETH ETFs if your goal is to hold them for an extended period and potentially earn passive income through dividends.
If you buy…
— Michael Ionita (@mizi) July 24, 2024
Meme Coins Outshine the Ethereum Ecosystem YTD
Meme coins like Bonk (BONK), Dogewhiz (WIF), and Pepe (PEPE) outshone every other sector within Ethereum this year according to Boutique Digital Asset Research’s findings. However, it is important to note that even meme coins underperformed Bitcoin in terms of both absolute returns and risk-adjusted performance. On the flip side, Layer 2 networks demonstrated the poorest performance across all analyzed sectors.
The correlation study revealed that Ethereum’s Betas had a positive relationship with Ethereum itself. Among other assets, Arbitrum (ARB), Optimism (OP), and Synthetix (SNX) demonstrated the strongest correlations. Throughout the bull market that started in June 2023 following BlackRock’s Bitcoin ETF announcement, meme coins consistently remained a constant element.
Meme coins primarily thrived on the Ethereum network; however, Solana has emerged as a formidable competitor, giving birth to numerous meme coins valued at over a billion dollars each.
It’s plausible that investing in Solana (SOL) through Boutique Digital Asset Research has yielded superior risk-adjusted gains so far this year.
Technical Analysis: Ethereum Price Eyes $2,800 As Bitcoin Recovers
The trend in the ETH/BTC chart is primarily moving downwards, as evidenced by the succession of lower peak prices and bottom prices. Lately, there have been noticeable drops followed by minor rebounds, suggesting either a possible price reversal or a period of price stabilization after a prolonged slide.
The price trend of Ethereum relative to Bitcoin is currently moving beneath its 50-day and 200-day exponential moving averages, suggesting a persistent decrease in value. Based on the Ethereum price projection, it’s expected that this downtrend will persist until the next significant support level, approximately 0.0447 BTC, is reached. On the other hand, these EMA levels function as resistance points at around 0.05336 BTC and 0.05276 BTC.
The price of Ethereum against the US Dollar hit the $3,125 mark, which was where the 200-day moving average lay, before bouncing back. At present, the 50-day moving average, priced at $3,360, is serving as a hurdle for the asset and could potentially cause it to decline further.
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2024-07-26 09:00