Ethereum (ETH) is down by 7.91% as of today, despite the successful launch of Spot Ethereum ETFs that attracted $10.2 billion in assets and recorded net inflows of $107 million. Why the struggle?
After maintaining a neutral trend for about a week, Ethereum has failed to break through a critical resistance zone. As a result, it has experienced a 7.30% correction in the past day, with a trading volume of $20.662 billion, reflecting a 7.83% change.
According to the 10X research report, the initial excitement surrounding the Ethereum ETF launch has waned, resulting in a typical “sell-the-news” scenario. This trend has been observed during similar events in December 2017, April 2021, October 2021, January 2024, and now July 2024. This pattern often indicates that after the initial launch hype, a market correction tends to follow.
The report also highlights the unfortunate timing of the ETF launch, which coincided with the distribution of Bitcoin from Mt. Gox, adding extra selling pressure to the crypto market. Additionally, the US tech earnings season has begun poorly, with significant sell-offs from companies like Alphabet and Tesla.
With 40% of the market capitalization set to report next week, a conservative outlook due to weakened consumer spending could further impact the market. Furthermore, Ethereum (ETH) appears particularly vulnerable in the current market conditions. Its fundamentals, including new user growth and revenue, have stagnated. Before the ETF launch, 10X Research identified Ethereum as overbought and ripe for a short trade—a view supported by a 6% decline since the report.
If the market regains momentum, Ethereum will aim to test its resistance level at $3,272.50. Should the bulls sustain the price at this level, it could set the stage for ETH to challenge its upper resistance level of $3,700 in the coming weeks.
If the bears continue to dominate the market, Ethereum’s price will likely fall toward the support trendline of the triangle pattern. If the bulls fail to hold the price there, ETH will prepare to test its crucial support level of $2,870.
Read More: Digging Deep As To Why Ethereum (ETH) Is Down Today