Peter Brandt's recent technical analysis has likely sparked new optimism in the Ethereum community. According to his chart patterns and market direction prediction, Ethereum (ETH) could massively surge sooner rather than later. Pointing to a 'four-month rectangle' forming on the price chart of the second-largest cryptocurrency by market capitalization, he says such consolidative actions generally precede a breakout.
Moreover, Brandt pointed to the formation of a 'horn bottom', where, this pattern suggests buying pressure is building, leading to a price rally. Brandt sees these patterns putting Ethereum over $5,600 and moving up from these levels.
The strong outlook is coinciding with increasing excitement about the possible approval of Ethereum ETFs. Some industry watchers believe that the U.S. SEC may give the go-ahead, and issue a preliminary approval to some Ethereum ETF proposals submitted before July 23.
An Ethereum ETF introduction provides an existing traditional investment vehicle for investors to access exposure to the digital asset, thereby attracting the much-needed capital inflows into the cryptocurrency, potentially driving up its price. Meanwhile, a number of big asset managers—BlackRock, Bitwise, Invesco, and Fidelity—are all competing for the most attractive fee structures.
Both Invesco Galaxy and BlackRock set their fees at 0.25%, although the latter has the arrangement to allow fee waivers. Bitwise has declared that its fee will be 0.20%, with an initial discount for the first $500 million in assets. Grayscale's mini Ethereum ETF will have a fee of 0.25%, with waivers up to $2 billion or for 12 months. Franklin Templeton brings up the rear on fees, at 0.19% with a significant waiver until January 2025.
Matt Hougan, Bitwise's chief investment officer, believes that an Ethereum ETF might create just as much excitement — at least in terms of its influence on price — as the approval of its Bitcoin counterpart. In fact, he expects the cryptocurrency to surge well into $5000 by the end of 2024.
He lists three key reasons why he is optimistic: the almost zero inflation rate of Ethereum, the lack of significant selling pressure from ETH stakers, and around 28% of all ETH is staked and, therefore, off the market.
Hougan's view is in line with that of other market watchers who perceive potential inflows into Ethereum ETFs to have been underestimated. The launch of spot Ether ETFs in the U.S. as per the report may bring in $15 billion of net inflows in the first 18 months, further supporting the bullish sentiment.
While some traders share the same bullish sentiment, others are more cautious on Ethereum's short-term prospects. One such trader is the popular pseudonymous analyst Kaleo, who believes that sometimes—due to selling pressure and general market volatility—the launch of an ETH ETF can be a sell-the-news moment for the price of Ethereum.
However, recent market trends have shown that Ethereum is flipping the key 1D pivot area of $3400-50 for support. There was earlier worry in that zone about the potential price weakness emanating from the support/resistance level around $3400. Since this area has indeed been taken up by Ethereum as support on local timeframes, including 1D, the original correction from this area idea has to be invalidated.
Now, traders eye the $3900-$4000 zone ahead of ETF approval. Depending on how price action reacts around this level, the next plans will be unfolded.