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Ethereum (ETH) is trading at $3,297, marking a 4.29% decline in the past 24 hours and a 2.15% drop over the last seven days. However, Ethereum maintains a solid market capitalization at around $396.33 billion, with $13.63 billion in trading volume.
Since March 27, Ethereum has technically been in a consistent decline, forming a series of lower highs and lower lows. This prolonged downtrend makes investors and analysts search for the signals of a probable reversal.
As Ethereum keeps falling, the 0.786 Fibonacci retracement level has developed into a very crucial supporting area. This level, sitting within a fundamental order block, should pave the way for a potential pullback. For Ethereum to put a lid on its bear market and emerge into a bull, the market structure on the lower timeframe has to change. In essence, analysts are looking for higher lows and higher highs. This type of trend would signal a shift in momentum and perhaps open the path to a sustainable upward swing.
US-based spot Ether exchange-traded funds (ETFs) may be launched in the upcoming weeks, leading to Ethereum outperforming Bitcoin. Bitcoin will come under additional selling pressure as $8.5 billion is returned to creditors of the collapsed exchange Mt. Gox.
Over the last 12 months, the value of ETH had declined against Bitcoin to a yearly low of 0.045 on May 24. But quite suddenly, after the SEC unexpectedly approved Ether ETFs to be listed, the price of Ether against Bitcoin sharply changed direction. This surprise decision by the SEC caused ETH/BTC to increase to its current value of 0.055.
Although the ETF news is positive for Ethereum's long-term outlook, the technical picture for the short term seems dicey. Ethereum has had its latest struggle to clear the $3,520 resistance zone, hence sparking a fresh decline. The price currently trades below the 100-hour moving average and the critical support level of $3,250.
On the hourly chart, the price looks to struggle above a bearish trend line forming near $3,280. Any rise could face sellers near the $3,320 and $3,365 levels. A clear break must be above the $3,500 level for a more substantial bullish bias.
Spot Ether ETFs are finally coming to America. Asset manager Bitwise recently updated its S-1 filing with the SEC, potentially launching in July. All these have excited many of the crypto investors. Some analysts are predicting massive inflows into these new financial products. At least one crypto exchange, Gemini, believes that spot Ether ETFs in the U.S. could easily see a round figure of $5 billion net inflow into the first six months after the listing.
Gemini findings, however, show that with spot Ethereum ETFs launched, it would double total AUM. Excluding some of the anticipated new inflows by rolling them into the current assets found in Grayscale Ethereum Trust (ETHE), total AUM for U.S.-based spot Ethereum ETFs could be between $13 billion to $15 billion in the first half-year of trading.
Ethereum's market value, compared to Bitcoin, sits close to its lowest levels over the years. However the anticipated capital inflow to these new vehicles could still make their market position better than Bitcoin. Indeed, a return to the three-year median of 0.067 in the ETH/BTC ratio would mean an almost 20% gain. Return to the maximum ratio this period at 0.087 would mean a 55% rally.
