Agree 💯

Ethereum’s highly anticipated spot ETF started trading last night. Contrary to what many expected, the market didn’t go wild. As QCP Capital pointed out, the launch didn’t bring the fireworks some were hoping for.

On the first day, net inflows for ETH were around $107 million. In comparison, Bitcoin saw $655 million, mainly because of a $484 million outflow from ETHE.

Market reaction

ETH volatility also took a hit across the term structures. Interestingly, the premium on Ethereum compared to Bitcoin vols reversed. Now, Bitcoin’s 1-week and 2-week options are trading 1-3 points higher than Ethereum’s. 

Despite this lukewarm start, QCP maintains a bullish outlook for Ethereum. They point to Bitcoin’s past performance after its ETF launch as a precedent.

Bitcoin reached an all-time high two months after its ETF launch, and they think Ethereum could have the similar pattern.

With volatility still at decent levels, QCP believes implementing an Accumulator strategy could be a smart move to take advantage of the slow upward trend. 

The strategy involves buying ETH spot at a 10.1% discount every week, as long as the spot price stays below $3,900.

What the indicators are saying

At press time, Ethereum is trading around $3,329, down 1.42% from its previous level. This drop has pushed the price close to key support levels, especially around $3,300.

The chart shows that Ethereum is trading below its key moving averages. The 50-day moving average stands at $3,466, and the 200-day moving average is at $3,454. 

Being below these averages hints at a bearish short-term trend, even though the long-term sentiment remains bullish.

The Bollinger Bands are showing increased volatility. The upper band is at $3,502.57, and the lower band is at $3,356.13. Ethereum’s price is currently testing the lower Bollinger Band, so it is oversold.

The On-Balance Volume is sitting at 797.158K, showing a significant decline in buying volume. This means selling pressure is currently outweighing buying interest. This pattern is typical in a consolidation.

The MACD, though, is still heavily in bearish territory. The MACD line is at -10.62, and the signal line is at -15.32, with the histogram showing a value of -25.94.

All in all, the market seems to be in a wait-and-see mode. The initial reaction to the ETF launch was muted, and many are now watching for any signs of a change in momentum.