10x Research says the crypto market is entering a “seasonally weak period” as spot Ethereum ETFs (exchange-traded funds) show a pattern reminiscent of spot Bitcoin ETF launches.
10x Research founder Markus Thielen pointed out in a recent interview that bullish traders have “overlooked potential billion-dollar outflows from Grayscale and the tendency for exchange listings to trigger ‘sell the news' reactions.”
Ethereum ETFs Launch Alongside Mt. Gox Repayments
The approval and subsequent launch of spot ETH ETFs coincided with the first BTC distributions from the infamous Mt. Gox exchange, exacerbating selling pressure in the market. According to 10x Research, Grayscale’s $9 billion Ethereum Trust experienced severe outflows, losing $481 million on the first day and $326 million on the second.
In stark contrast, other ETF issuers, such as Bitwise, saw significant inflows, with $204 million on the first day, primarily driven by venture capital firm Pantera Capital. Despite these inflows, Pantera’s rapid sell-off of its "seed investment" suggests a cautious approach towards sustained growth.
The report from 10x Research presents a bearish outlook on Ethereum, indicating that the crypto was overbought prior to the ETF launch. The analysis also points out stagnant or declining fundamentals such as new user growth and revenue.
The Ethereum price has dropped more than 7% over the past 24 hours. This sharp decline aligns with the report’s suggestion that ETH lacks a clear value proposition compared to Bitcoin, which is often regarded as "digital gold."
“While tech investments are often risky,” the report notes, “Wall Street people usually don’t place bets on things they don’t understand.”
Solana on the Rise: A New Contender?
Amid the turbulence, Solana appears to be gaining traction. A report dated July 23 from 10x Research reveals a stochastic indicator showing Ethereum at the top of its range, hinting at a potential market top. The indicator, which reads above 90%, is often associated with a correction, and with Ethereum currently at 87% (down from 92%), a further decline seems probable.
The report also highlights a shift in interest from Ether to Solana, particularly in the context of memecoin issuance, which is increasingly favoring the Solana blockchain over Ethereum.
Investors are cautioned about the potential for further declines, influenced by several factors. The overhang from Mt. Gox, the upcoming United States earnings season, and historically weak periods for cryptocurrencies in August and September all contribute to a bearish outlook.
Ethereum Price Prediction: Bears Dominate as Key Support Levels Loom
$ETH continues to struggle as it grapples with significant resistance and support levels on the 4-hour chart. With a closing price of $3,160.39, the cryptocurrency shows signs of bearish momentum as it hovers near critical support levels.
Currently, ETH is trading near the $3,180.53 mark, a crucial resistance level that it must surpass to regain bullish traction. The next significant resistance levels are at $3,408.08 and $3,419.6. However, Ethereum faces substantial downward pressure, and the support levels to watch are at $3,086.91, $3,077.2, and $3,070.0. A breach below these support levels could trigger further declines.
Technical Analysis
Technical indicators present a bearish outlook. The 9 EMA (Exponential Moving Average) is trending below the 20 EMA, indicating a downtrend. The MACD (Moving Average Convergence Divergence) histogram is consistently negative, signaling sustained bearish momentum. Meanwhile, the MACD line is significantly below the signal line, further confirming the downtrend.
The RSI (Relative Strength Index) remains below 30, suggesting that #ETH is in oversold territory. This could indicate a potential for a short-term rebound, but the overall sentiment remains bearish.
For traders considering entry and exit points, the current market conditions suggest caution. For short trades, entering around the $3,180.53 resistance level could be favorable, with potential exit points at the support levels of $3,086.91 and $3,077.2. Conversely, if the Ethereum price shows signs of a reversal and breaks above $3,180.53, long positions could be considered, targeting the resistance levels at $3,408.08 and $3,419.6. $SOL #ETH_ETFs_Trading_Today #ETH_ETFs_Approval_Predictions
