As a seasoned analyst with over two decades of experience in the financial markets, I’ve seen my fair share of market fluctuations and trends. Having closely observed the Ethereum (ETH) ecosystem since its inception, I must say that the current situation presents an interesting mix of opportunities and challenges.
In simple terms, the cost of Ethereum might be at a crucial point before the Federal Open Market Committee (FOMC) meeting. It’s expected that the Fed will maintain the interest rates within the range of 5.25% to 5.5%, based on the recent more lenient statements from the chairman, Jerome Powell.
Investors might encounter some fluctuations in the Ethereum market, despite its efforts to maintain a base at roughly $3,300. On the other hand, Bitcoin appears steady above the $66,000 mark, while certain alternative coins like XRP, Toncoin, and Binance Coin show minor decreases within the single-digit range.
Is The Spot ETH ETF Inflow Resurgence Sustainable?
On Tuesday, the net flow of Ethereum ETFs turned positive following a series of outflows, according to data from SoSoValue. This positive inflow amounted to approximately $33.7 million, potentially signaling the start of an upward trend.
For a consistent upward movement, there should be positive net flows for at least three uninterrupted days, given that we currently have a substantial negative cumulative total net inflow amounting to $406 million.
Similar to how Bitcoin ETFs account for a large portion of their outflow, Grayscale withdrawals make up a significant part of the Ethereum ETF’s withdrawal volume. Recently, about $120.3 million was withdrawn from the ETHE product, which represented approximately $1.84 billion of the company’s total net outflow volume.
The anticipated reduction in the outflow of Ether from Exchange Traded Funds (ETF) is likely to boost the demand for Ethereum. Consequently, the price of Ethereum may rise and potentially mimic Bitcoin’s surge towards a fresh record high after the approval of spot ETFs in Q1.
Ethereum Price Points To Further Upside
Currently, Ethereum is situated between two significant Exponential Moving Averages (EMAs): the 20-day EMA offering support at approximately $3,307 and the 200-day EMA providing resistance at around $3,335. On Tuesday, a sudden dip to roughly $3,200 attracted liquidity, propelling the price upward since then.
In simpler terms, when the Moving Average Convergence Divergence (MACD) indicator suggests a pattern of sideways movement in the market, it’s likely more influential than the Federal Reserve’s decision regarding interest rates at that moment.
If the MACD (Moving Average Convergence Divergence) line in blue signals an uptrend by moving above its signal line, it’s likely that the price of Ethereum will start to accelerate and surpass the resistance level of $3,400.
Such a surge might suggest that buyers are back in charge, capable of propelling the price beyond $3,500, potentially triggering a fear-of-missing-out (FOMO) surge that could drive the price over $4,000.
Based on an earlier estimation about Ethereum’s price, falling below the $3,300 level could indicate a shift in power, with bulls potentially taking control. In such a scenario, traders might want to think about going short on ETH if the Moving Average Convergence Divergence (MACD) gives a sell signal and drops beneath the neutral line.
Alongside the latest price stabilization at $3,200, an upward sloping trendline visible on the graph should aid in managing any corrective action, thereby preventing a potential decline to $3,000.
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2024-07-31 19:26