Ethereum Price Analysis: ETH Drops From Bull Pattern But ETH ETF S-1 Approvals Likely In The Summer Could Turn it Around

While BTC may be in for a quiet summer, the same can’t be said for the Altcoins King. According to QCP Capital, Ethereum options are showing quite higher volatility compared to BTC. This suggests that despite an anticipated market cooldown, Ethereum could see a surge in trading activity over the coming months.

As of writing Ethereum is trading at $3,535 which is up by 0.65% in the last 24 hours but down 4% in the last 7 days. It has a $424.8 billion market cap making it the king of all altcoins. Its trading volume is $15.9 billion in the last 24 hours and also representing over 13% gain from the previous day.

QCP Capital advised traders to consider accumulating ETH positions in preparation for what they termed "the long, quiet summer" for Bitcoin. This accumulation strategy could pay off if the BTC volatility remains cold while Ethereum rides the trend.

One potential catalyst for increased Ethereum activity is speculation surrounding the approval of a spot Ethereum Exchange Traded Fund (ETF) later this summer. SEC Chair Gary Gensler recently told Senator Bill Hagerty that Ethereum ETF S-1 filings will likely get approved "over the course of the summer."

The launch of a spot Ethereum ETF would likely drive the price to new all-time highs above the previous record of $4,878 set in November 2021. 

On chain data from CryptoQuant is currently painting a bullish outlook for Ethereum as well. Over $1.5 billion worth of Ethereum has been withdrawn from exchanges since June 9th. Exchange reserves of ETH have declined by 1.2 million ETH (over $4 billion) since late May. This is often interpreted as investors pulling coins off exchanges to hold long term rather than selling.

From the technical point ETH recently broke down from a bullish flag after recording a $3,973 high on May 27th as analyzed in our previous report. This is after it dropped and closed below the bullish flag, invalidating bullish pressure in the near term.

Since then price has been trading bearish and looks set to get support at the demand zone marked on the chart after the price broke out of the ranging channel impulsively on May 20th.

Looking at the EMAs,  the 50-day and 100-day exponential moving averages at $3,406 and $3,422 respectively are acting as support to the price in the short term at the current level while the 200-day EMA at $2,974 leaves room for further downside.

The 50-day and 100-day exponential moving averages around $3,400 are currently acting as resistance, while the 200-day EMA at $2,974 leaves room for further downside. Filling the fair value gap left on the breakout on May 20th is a possibility.

Our point of interest remains at the demand zone. This is where the price is more likely to retrace to, clearing liquidity and filling the huge fair value gap left after the ranging channel breakout on May 20th, before a strong bullish reversal is witnessed.

On-chain data from Coinglass shows the ETH futures long-short ratio at 0.94 indicating a slightly bearish tone. However TheBlock data shows a downtrend in new addresses appearing on the network from over 144k in mid May to below 100k in June could signal a loss of bullish momentum for now.

With the potential for an Ethereum spot ETF, implied volatility heating up and on-chain metrics leaning bullish, all eyes will be on Ethereum this summer. While Bitcoin cools off, the king of altcoins could be gearing up for its next major move.