The rumours / media reports / news and statements surrounding the possible introduction of Ethereum ETFs in the US have caused the markets to be driven upwards by emotionality over the past 10 days. Should this issue calm down (temporarily) and the media cool down, the market could enter a slightly negative consolidation phase.
Thought of the week
Digital Asset News
Analysts, including us at Teroxx, are sceptical of the assumption that Ethereum’s price will drop after the launch of the first US Ethereum spot index funds (ETFs), similar to what happened with Bitcoin after spot Bitcoin ETFs started trading.
“I think the likelihood of a sell-off after the release is much lower for ETH ETFs compared to the BTC ETFs,” crypto trader Matthew Hyland explained in a post on X (formerly Twitter) on 24 May.
In this context, Hyland pointed out that, unlike Ethereum, Bitcoin had not experienced a price decline in the period prior to the approval of the Bitcoin spot ETFs on 10 January.
“The BTC ETF did not experience any major setbacks in the months leading up to the authorisation. The selling pressure only started when the Grayscale ETF was listed the following day,” Hyland added. Since the launch of spot bitcoin ETFs, the Grayscale Bitcoin Trust (GBTC) has lost $17.6 billion in capital, according to data from Farside.
By 20 May, however, Ethereum’s price had fallen by 15% in two months before media reports suggested that the SEC may have changed its stance on ETF approvals, with Ethereum rising by a noticeable 29% shortly afterwards.
Analysts often refer to the price trends of past cycles in order to draw conclusions for the present. This is why the upward trends of 2016/17 and 2020/21 are once again coming into focus.
Although the current bull market of 2024 has in some ways broken with the past by setting a new record high this time before the Bitcoin halving, there is still good evidence that the price of the market-leading cryptocurrency still has plenty of room to rise.
In this context, Jelle refers to the relative strength index (RSI) as an important indicator.
The RSI shows the extent to which a cryptocurrency is overbought or oversold at a certain point. The weekly chart in particular looks very positive for BTC with regard to the indicator.
“Bitcoin is behaving incredibly similarly to the beginning of 2017,” summarises Jelle.
In the corresponding price chart, the expert compares the price development from that time up to the record high of USD 20,000 in 2017 with the movements from January 2023 until now.
Today, just like seven years ago, the RSI is declining, although the price is close to a current record high.
“A hidden bullish divergence and choppy price movements in the immediate vicinity of a record high – then comes the big breakout,” as the analyst comments on the comparison.
“As soon as we get above 75,000 US dollars, everything could happen very quickly.”
The US Securities and Exchange Commission (SEC) approved Ethereum spot index funds (ETFs) in the first instance on 23 May. However, the actual approval process differed slightly from the approval of the Bitcoin spot ETFs in January.
Unlike the spot Bitcoin ETFs , which were approved by a five-member committee, including SEC Chairman Gary Gensler, by vote, the spot Ethereum ETFs were “only” approved by the SEC’s Division of Trading and Markets.
The SEC initially approved the so-called 19b-4 applications from BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy and Franklin Templeton, but has so far declined to comment on the official decision. Regarding the authorisation, it merely states:
“On behalf of the Commission, by the Department of Trading and Markets, pursuant to delegated authority.”
While many observers from the crypto community wondered about the difference in the approval process for the two crypto ETFs, Bloomberg ETF analyst James Seyffart explained that this is normal.
He pointed out that this is how many approvals work, because if the SEC “required an official vote every time for every decision or document – that would be crazy. Still, it would have been nice to see what the agency’s policy stance is.”
It appears that the initial changes to the power structure have had an effect on the SEC.
Digital Asset Market
Market report including trading idea
The majority of digital assets had a slightly positive week, but Ethereum, driven by the ETF theme, had a strongly positive week!
On a weekly basis, the overall market performance was around 3,71 %.
The outlook for the coming week is as follows: If the ETF issue continues to be picked up by the media and the global financial markets act positively, the markets could experience a further upswing. Otherwise, the trend is likely to be more of an easing and a slight decline in prices.
Chart technology
From a technical chart perspective, Bitcoin continues to hover around the resistance level of ~$70,000 and has not been able to conquer it sustainably. As a result, the only option at the moment is to adopt a wait-and-see approach to see whether new support zones are formed or the resistance can be broken through. Increased volatility can only be expected once the trend has been confirmed.
The next price targets in the event of a positive trend: ~$71,500, ~$73,000, ~$76,500
The next price targets in the event of a negative trend: ~$68,000, ~$66,750 ~$65,000
Trading idea
If the market is positive, all altcoins that have not experienced any major upswings in the past 10 days could be a good buy. Otherwise, stop losses should be tightened urgently in order to protect yourself.
Weekly overview
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