Ethereum Futures ETF may be approved what will happen to the price?

If Ethereum Futures ETF is approved, what will happen to the price?

Author: Ibrahim Ajibade, BeinCrypto Compilation: Shan Ou Ba, LianGuai

In the sluggish market, Ethereum (ETH) bulls successfully held the support level of $1,600 this week. Recent reports suggest that Ethereum futures ETFs may be approved, and how will the ETH price react in the short term?

Bloomberg quoted anonymous sources as saying that the U.S. Securities and Exchange Commission will approve multiple ETH futures ETF applications, and the price of Ethereum (ETH) will immediately rebound to $1,700. The report pointed out applications from Wall Street giants such as ProShares, Volatility Shares, Bitwise, and Roundhill.

However, key on-chain analysis studies how the ETH price will react in the next few weeks.

Whales who are proficient in prices are still selling ETH on the market

On-chain data shows that Ethereum whales have not accepted Bloomberg’s recent bullish report. In fact, despite a moderate rebound after strong selling on Friday, they continue to sell their holdings.

As shown in the figure below, the Ethereum whale group holding 10,000 to 100,000 coins has been dumping them in the market since mid-July. Apparently, they sold 1.12 million ETH between July 14 and August 18.

Currently, the trading price of ETH is about $1,660, and the 1.12 million tokens sold by whales are worth $1.86 billion. It is worth noting that the recent trading pattern of this group of whales is closely related to the ETH price trend. As expected, although the whale’s holdings have decreased by 4%, the ETH price also fell by 18% between July 14 and August 18. However, if the official statement of the U.S. Securities and Exchange Commission confirms Bloomberg’s recent report, it may convince them to end the selling frenzy.

Ethereum is now approaching the oversold zone

After a month-long selling frenzy by whales, Ethereum now seems to have entered the oversold zone. According to the relative strength index data, Ethereum’s daily RSI on August 18 was at 14. In simple terms, this means that 86% of the daily price changes of ETH in the past two weeks have been in a downward trend.

The relative strength index data evaluates the strength and momentum of the current price trend of an asset. When the RSI falls below the 30 level from above, it indicates that the asset is now oversold and may experience a bullish reversal. Strategic investors may interpret this as a buy signal on dips, as it is expected that the ETH price will react positively in the coming days.

ETH price prediction: Bullish expectations may remain above $1,500

Due to the current oversold condition of ETH RSI, investors seeking a potential reversal may offset the continued selling frenzy. The on-chain market depth chart of the exchange, which shows the current distribution of active order prices, also confirms this situation.

As shown in the figure below, if the price falls to $1,500, strategic cryptocurrency traders have placed orders to buy 50,720 ETH. However, if the bearish momentum in the industry strengthens, it may push the ETH price up to $1,400 before rebounding.

On the other hand, Ethereum bulls may react to the futures ETF approval report and try to reclaim the milestone of $1,900 as early as possible. However, as shown above, once the price touches $1,825, cryptocurrency traders have opened orders to sell 25,380 ETH. If there is not enough market demand, they may slow down the recovery process. If ETH breaks through this resistance level, the bulls may push for a target of $1,900.

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