3 Reasons Why Ether Price Remains Stupid Around $3,500
Ether (ETH) fell to $3,363 on June 16 after sliding 15% from $4,000. The second-largest cryptocurrency by market capitalization is down 4% over the past seven days.
Data from Cointelegraph Markets Pro and TradingView shows Ether's price hovering around $3,518, down 14% from the multi-year high of $4,091 set on March 12.
A 43% jump in daily trading volume in conjunction with Ether's collapse reinforces sell-side activity, currently at $14 billion.
Despite this gloomy outlook, ETH seems to have found support from the $3,500 level, and several technical and on-chain metrics point to potential upside for Ether.
Reduce supply on accessories
One factor supporting Ether's rise is the reduction in exchange supply. According to onchain data provider CryptoQuant, Ether's exchange rate reached a five-year low of 16.7 million ETH following a 9.3% decline over the past 90 days.
The total inflows and outflows between centralized exchange wallets show a sharp decline between May 20 and June 14, when withdrawals from the trading platforms started to grow. This decrease comes with a 14 percent increase in Ether's price over the same period.
The dwindling supply of ATH on exchanges is simply investors withdrawing their tokens into self-storage wallets, indicating a reluctance to sell in anticipation of future price increases.
This is explained by the increase in the stock of large owners in the last few weeks. Additional data from market intelligence firm Sentiment shows that wallets holding between 10,000 and 100,000 ETH have increased since May 25.
In a June 16 post on X, popular trader Ali Martinez shared Santiment's chart, saying:
“Ethereum whales have bought over 700,000 ETH in the last three weeks, totaling about $2.45 billion!”
This means whales haven't sold off in ETH's recent rally to $4,000, with the approval of spot ether exchange-traded funds (ETFs) in the United States. Instead, they continue to accumulate, suggesting that most want to put themselves to greater use.
A rise in Ether's open demand will support ETH higher
The increase in leveraged interest led to a rise in ETH futures open interest (OI), which increased to around $16.15 billion from $15.06 billion on June 14.
According to data from CoinGlass, EtherFuse OIA recovered more than $12 billion on May 21 after falling from this level on April 14. Since then, tOI has jumped 36% in less than 30 days, indicating increased demand for ETH positions.
Ethereum OnChain and Derivatives Markets reflect expectations and positioning for the Ether ETF to launch in the coming weeks.
From a technical perspective, ETH's recent drop is preceded by a growing bullish divergence between the price and the Relative Strength Index (RSI) in the four-hour time frame.
Ether prices fell between June 10 and June 14, creating new lows. But during the same period, the daily RSI will make higher highs and higher lows.
In technical analysis, the mass difference between the falling price and the rising RSI indicates weakness in the current downtrend, allowing traders to find low prices in the area.
Launch spot Ether ETFs to boost ETH value
The historic approval of SpaceEther's ETF filings by the United States Securities and Exchange Commission (SEC) on May 23 saw the price soar more than 12% to $4,000. Before that, the price had jumped 33 percent in less than a week, pending approval.
Market participants are now eagerly awaiting the spot for Ether ETF to begin trading, analysts have pegged July 2 as the launch date.
According to Eric Balchunas, senior ETF analyst at Bloomberg, the SpotEther ETF is likely to begin trading in the U.S. on July 2.
Balchunas' comments signaled a reversal of confidence from his previous position, when he said he was still waiting for feedback from the SEC as Ether ETF applicants debated whether to scale back his July 4 forecast.
“Note: last over/under was July 4th so this isn't a huge change but 1) we're starting to feel like it's going to take longer so that's good news and b) we'll be deciding where to bet most on the base. It's torn 50-50 where to bet and July 2nd is now That's the day.
On May 23, the SEC approved eight 19b-4 filings to list Ether ETFs on various US exchanges. However, they are not allowed to start a business until they receive the necessary S-1 registration statement approval.
As market participants await the launch of Spot Ether ETFs, they expect the price of Ether to rise sharply in the days before and after the launch.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
