Ethereum (ETH) dropped 10% on Friday after Mt. Gox refunds BTC, resulting in over $108 million in ETH being liquidated. This refund reinforced the bearish trend on Bitcoin, affecting altcoins like ETH.

Daily market factors: Headwind from Mt. Gox, ETHE discount

Bankrupt exchange Mt. Gox began repaying creditors today after transferring approximately $84.87 million in BTC to the hot wallet of Japanese exchange Bitbank. The move increased bearish sentiment in the cryptocurrency market as altcoins, led by Ethereum, suffered sharp declines.

Although many expected ETH to be less affected by broader market sentiment due to the upcoming launch of a spot ETH ETF, the Securities and Exchange Commission's (SEC) slow move in approving Approval of issuers' draft S-1s may have helped reinforce the bearish momentum.

The SEC approved the 19b-4 forms of spot ETH ETF issuers on May 23 but needs to approve their S-1s before these products can begin trading. Potential issuers include VanEck, BlackRock, Bitwise, Grayscale, 21Shares, Fidelity, Franklin Templeton and Invesco.

Meanwhile, Grayscale Ethereum Trust (ETHE) moved from trading at a discount to its net asset value (NAV) to around 0.31% higher on July 3, according to data from YCharts.

A trust trading at a discount or premium to net asset value means that one share of the trust trades below or above the market price of the underlying asset it tracks.

ETHE Discount or Premium to NAV | Source: YCharts

ETHE has been trading at a discount because investors had to sell their shares to exit the position, as the trust did not allow them to exchange for cash. This discount especially increased between March and May following rumors of an Ethereum 2.0 investigation by the SEC.

However, the gap has narrowed and is now higher as investors aggressively bought discounted shares after the SEC approved the 19b-4 filings of potential issuers. The $9.5 billion ETHE fund will convert to an ETF when spot ETH ETFs go live.

Technical analysis: ETH may start an accumulation phase

ETH is trading around $2,982, down 2% in the past 24 hours. The subsequent decline from Thursday's low caused historic liquidations for ETH, wiping $134 million in open positions from the market. Liquidation of Long increased to 108.4 million USD, while liquidation of Short was nearly 26 million USD.

ETH price hit May lows, when most investors expected a spot ETH ETF to be rejected following reports that the SEC was investigating Ethereum 2.0.

ETH broke the key $2,852 support level but quickly registered a weak liquidity gap, as this is a key demand zone for the leading altcoin.

ETH/USDT 8-hour chart

ETH has not sustained an extended decline below this support since mid-February. Additionally, data from IntoTheBlock revealed that investors purchased approximately 57.02 million ETH around the price range of 2,268 to 2,909 USD.

Considering these factors, ETH may not be able to sustain a long-term decline below the $2,852 support as the weekend approaches. ETH is likely to start a sideways trend around the price range between $2,852 and $3,367, where it has been trading for nearly five weeks (April 12 – May 19).


Source: https://tapchibitcoin.io/ethereum-bi-thanh-ly-ap-luc-mtgox.html