Tomorrow is a big day for Ethereum. Eight spot Ethereum ETFs are set to start trading. Grayscale, Fidelity, Invesco, VanEck, Franklin Templeton, 21Shares, Bitwise, and iShares (BlackRock) are the issuers.
Let’s talk about what you should expect from both the stock and crypto markets once they go live.
Analysts believe that these ETFs could affect ETH’s price more than Bitcoin’s did to it. This is because of Ethereum’s lower inflation rate, lower staking costs, and the fact that 28% of ETH is staked.
Some predict that ETH could see a modest price increase in the beginning. But as investors move out of Grayscale’s ETH trust, there might be a “sell the news” event. But, don’t lose hope. New highs could still be reached by the end of the year.
Right now, Ether’s trading at $3,439, down slightly by 0.64%. The price action shows consolidation within a narrow range. This means traders are actively waiting for the ETF launch.
Key resistance levels to watch are $3,641, $3,768, $3,895, and $3,974. If bullish momentum picks up, breaking these levels will see us smashing way past $4,000.
The Ichimoku cloud shows short-term support at $3,499, while the TEMA (9) indicates support at $3,457. Holding these levels could signal a bullish continuation.
But a drop below will trigger a prolonged consolidation. The RSI divergence value of -9.63 points to a potential bearish move or correction period in the near future.
Just like the outflow seen with Grayscale’s BTC ETF during its conversion, the Ether ETF might face the same issue. Grayscale’s ETH ETF has a higher management fee of 2.5% compared to the typical 0.2% for other ETFs.
This could cause like $10 billion in selling pressure. That’s big enough to shake Ether’s price and make it tumble below $3,000 for the first time in many months. QCP Capital said:
“The lack of positive reaction is a negative reaction. Right now, the market seems to be seeing who folds first to ‘sell the news’.”
More volatility is expected throughout the week. The anticipation has already caused implied volatility in ETH options to jump from 56% to 70%. This means the market is bracing for a bumpy ride.