According to U.Today, the cryptocurrency community is eagerly awaiting the decision on Ethereum (ETH) exchange-traded funds (ETFs). In the midst of this anticipation, the latest analysis from legendary trader John Bollinger has drawn significant attention. Bollinger, a technical analyst known for creating the Bollinger Bands, a widely used technical analysis tool, has expressed his views on the ETH market.
Bollinger has recently made several inquiries about the Grayscale Ethereum Trust (ETHE), which has been a key indicator in recent days, stirring up anticipation about the approval of Ethereum ETF. Grayscale Investments is hoping to convert its Grayscale Ethereum Trust (ETHE) into an ETF, pending approval from the Securities and Exchange Commission (SEC). As speculation has grown, the fund's discount to its underlying Ethereum holdings has dropped to less than 7% from 20.5% on Friday and up to 56% last year. This pattern mirrors what was observed in January before the SEC approved the conversion of Grayscale's Bitcoin Trust.
However, Bollinger believes that the market has already factored in most of the news about the Ethereum ETF. He suggests that the resultant discount, which is believed to be in relation to Grayscale's ETHE, has largely disappeared. Bollinger also feels that the current market move is overextended, suggesting that the price may have peaked and could be followed by a correction. As a result, he announced on Twitter that he has reduced his position.
Ethereum (ETH), the second largest cryptocurrency by market cap, has seen a rise of more than 29% this week and was trading up 3.92% in the last 24 hours to $3,873 at the time of reporting. As the market awaits the Ethereum ETF decision, sentiment is a mix of optimism and caution. While the potential approval of an ETF could boost ETH prices, Bollinger's latest analysis suggests caution due to the possibility of a 'sell-the-news' event, where prices drop after the announcement as investors take profits.