Ethereum Begins H2 2021 Strongly: Anticipated US ETFs and Declining Exchange Balance Fuel Surge
Summary:
Ether (ETH) has seen a positive start to the second half of 2021, with its price increasing by approximately 2.5% to $3,469. This rise is in line with the overall growth of the crypto market's net capitalization. Major influencing factors for the increase include the forthcoming launch of Ethereum exchange-traded funds (ETFs) in the US and promising onchain metrics. Despite a delay in the expected launch of the Ethereum ETFs, predictions anticipate significant capital inflows resulting from the launch, which could boost Ether's price. Simultaneously, the total amount of Ether held by all crypto exchanges has dropped, indicating a decrease in selling pressure for ETH.
The second half of 2021 has started strong for Ether (ETH), gaining about 2.5% to establish a trading value of $3,469. This upward trajectory might be due to expected factors such as the forthcoming launch of Ethereum exchange-traded funds (ETFs) in the US, along with encouraging onchain metrics. This growth trend is not exclusive to Ether, as overall, the crypto market's net capitalization has lifted by around 2.3% to reach $2.32 trillion.
Ever since the announcement of spot Ethereum ETFs in the US, there has been an observable momentum building up for the price of ETH. However, the US Securities and Exchange Commission (SEC) caused a slight delay from the initial expected launch date of July 2nd upon reviewing the S-1 forms and requesting resubmissions by July 8th. This delay implies that the launch may be pushed back to mid-to-late July. The SEC, however, has hinted that the launch could still take place within the summer.
The spot Bitcoin ETFs' success has raised expectations regarding Ethereum ETFs, with predictions suggesting these may bring substantial capital inflows, fueling a surge in ETH price. Steno Research analysis projects these ETFs could draw about $15 to $20 billion within the first year, pushing Ether's price to reach $6,500 by the end of 2024.
Simultaneously, the total volume of Ether possessed by all cryptocurrency exchanges reached a 4-year low point, sinking to a mere 16.61 million ETH on June 30. This decrease corresponds to the increase in Ether's price, indicating diminishing selling pressure and a growing inclination towards storing ETH in private wallets or decentralized systems.
Further data demonstrates the value of ETH staked on the Ethereum Beacon Chain has continuously climbed since September 2021 to 33.33 million ETH as of June 30—almost double the amount held by exchanges. This rise has continued irrespective of Ethereum's Shanghai upgrade in March 2023, which removed the need for indefinite locking of staked ETH tokens. Despite having the option, most users have chosen not to withdraw their staked ETH, indicating preference towards the stability and rewards staking offers over selling.
From a technical standpoint, ETH currently trades above a strong support zone. The immediate support around $3,400 is within the $3,362 and $3,407 price range, suggesting the vital role this level plays for both buyers and sellers. If this level holds, then it might enable a surge past the 50-day simple moving average (SMA) at $3,536. However, if this level fails to hold, sellers may bring the price below this level, with the 100-day SMA at $3,380 offering significant support. Additional lines of defense might be seen from the 200-day SMA at $ 3,073 and the $3,000 demand level.
Remember, this article isn't intended to be an investment advice. Each investment and trading move involves a level of risk, and you should carry out your research before making any decisions.
Published At
7/1/2024 8:11:23 PM
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