It is expected that there may be a pullback after the Ethereum ETF is passed:
There was also a wave of pullbacks when the ETF of Bitcoin was passed, so why did this phenomenon occur?
1. Buy expectations, sell facts phenomenon: Before the release of major positive news, the market usually buys, and sells quickly after the news is released, causing the price to fall.
This phenomenon is because investors tend to buy before the news in the hope of profiting from the price increase after the news is released.
2. Short-term operations of large investors and whales: Large funds and market manipulators may take advantage of this situation to conduct short-term operations and quickly exit the market to make profits.
They may sell at a high price after the release of good news, causing a temporary drop in prices.
3. Grayscale ETH to ETHE: With the listing of Ethereum ETF, Grayscale Fund may convert a large amount of Ethereum into ETF shares for trading.
This operation may generate a certain amount of selling pressure in the early stage of ETF listing, triggering panic in the market and leading to a drop in prices.
4. Technical signals: The 6-hour chart shows signs of top divergence, which means that the market may lure shorts first.
Investors are advised not to blindly chase shorts, but to focus on rebound attempts near the support level of $3,420.
If the price can break through $3,600, a pin pattern may be formed, and then two or three top divergence signals may appear, indicating that the market may have a three to four hundred point correction.
