Recent approval Ethereum ETF applications by the U.S. Securities and Exchange Commission (SEC) on Thursday sparked speculation about further price moves for the market’s second-largest cryptocurrency as the trading start date approaches.
However, significant Ethereum (ETH) transfers to cryptocurrency exchanges have raised concerns about profit taking, portfolio rebalancing, and potential market speculation.
Sell-off Amid Ethereum ETF Green Featherlight?
According to for cryptocurrency analyst Ali Martinez, these events coincide with the moment Ethereum founder Jeffrey Wilke transferred 10,000 ETH worth approximately $37.38 million to the Kraken cryptocurrency exchange.
Moreover, the raise in Ethereum balances on cryptocurrency exchanges indicates a significant raise in the number of tokens available for sale.
The chart below shows that over 242,000 ETH was transferred to them cryptocurrency exchange portfolios over the past two weeks, signaling increased trading activity that could contribute to price volatility.
This trend, combined with Wilke’s transfer, suggests the possibility of a sell-off or increased profit-taking among market participants.
While industry experts such as Anthony Pompliano see the approval of the Ethereum ETF as a positive sign for the industry as a whole, investors are advised to exercise caution. For Martinez, the number of ETH deposits is increasing exchange wallets indicates a potential market reaction characterized by profit-taking or selling pressure.
Additionally, the analyst notes that the Tom DeMark (TD) Sequential indicator has presented a sell signal on the Ethereum daily chart, pointing to the potential for a pullback or a recent countdown phase before the uptrend resumes.
Ethereum Price Outlook in Focus
Delving deeper into price analysis taking into account IOMAP (input-output model and profitability) data, Martinez highlights that Ethereum is in a robust position demand zone from $3,820 to $3,700, where over 1.81 million addresses purchased approximately 1.66 million ETH.
This range could provide support amid increasing selling pressure. However, if this zone is not held, the next key support area will be between $3,580 and $3,462, where 3.13 million addresses have raised over 1.50 million ETH.
On the other hand, Ethereum’s most crucial resistance barrier is between $3,940 and $4,054, with over 1.16 million addresses buying approximately 574,660 ETH.
Martinez suggests that a daily candle close above $4,170 would invalidate the bearish outlook and potentially trigger a recent countdown phase higher, with a target around $5,000.
At the time of writing, ETH is trading at $3,719, reflecting a 2.5% retracement over the last 24 hours. However, according to the analyst’s assessment, Ethereum remains in the key demand zone.
As the market nears the launch and commencement of trading of all eight Ethereum spot ETF applications by the world’s largest asset managers, the exact impact on price action is not yet fully understood.
Featured image from Shutterstock, chart from TradingView.com
