Can ETH Price Break $3.5K? The first level of the Ethereum ETF is ahead of new highs, analysts say
As the industry is about to witness the launch of the first Ether exchange-traded funds (ETFs), the price of Ether may reach new highs.
Ether could hit a new all-time high after the launch of the ETH ETF next week.
The price of Ether (ETH) could be on its way to a new all-time high after the launch of the first US Spot Ether ETF, according to Matt Hogan, Chief Investment Officer of Bitwise.
Hugan cites three main reasons for Ether's peak, the rate of ETH inflation, the fact that Ether shares are not traded like Bitcoin (BTC) miners, and that 28% of Ether's supply is already out of the market.
In a July 16 blog post, Hugan wrote:
“The inflation rate of Ethereum has been exactly 0% in the last year. […] Does significant new demand meet 0% new supply? I like that bill. And if activity on Ethereum increases, so does the amount of ETH consumed. This is another organic demand generator that works in favor of investors.
According to crypto analyst Leon Weidman, other factors also point to the upcoming rally.
In a July 19 X post, the analyst wrote:
“$126M worth of ETH was removed from the exchange this week, indicating significant inventory before the EFT launch. The next big ETH rally is coming.
$3,500 remains high resistance
However, Ether futures indicate little confidence in the possibility of Ether breaking above the $4,000 mark in the short term, as the $3,500 mark remains a significant protection zone.
Ether's Relative Strength Index (RSI) suggests that Ether's price may need to cool down before rallying to new all-time highs. On the daily chart, Ether's RSI has risen to 58, indicating that the asset is not yet overbought, but is trading above its fair value, according to TradingView data.
RSI is a popular momentum indicator used to measure whether an asset is oversold or overbought based on the magnitude of recent price changes.
Related: Bitcoin analysts say 74K is the next stop for BTC price
An Ethereum shakeup may happen first.
Ether price may see a sell-on-the-news event first before starting a sustained rally to new all-time highs after the initial ETF launch.
Therefore, according to Alvin Kahn, CEO of Bitgate Wallet, the real opportunity to invest in Ether long-term may come after the initial weeks of the ETF.
Khan told Cointelegraph:
“Depending on how the market reacts to the approval of BTC spot ETFs, we expect ETH to jump in value for a short time after its own ETF gets the green light. However, there may be some selling pressure for a week or two due to withdrawals from instruments like Grayscale's ETF.”
ETH's price may climb more sustainably after the initial shock, Khan added.
“Once this initial shock is over, the price of ETH may begin to climb steadily each month based on the daily inflows into the new ETH space ETF.”
Other analysts expect the Ether ETF to have broader implications for the altcoin market. For example, popular crypto trader Mikubul expects the ETF to improve the next altcoin bull market cycle.
In a July 19 X post, the businessman wrote:
“They will be the main catalyst for a big rally in the ETH ETF that will trigger a big alts season this cycle.”
Ether's price is up more than 11 percent in the past week, but ETH is still 29 percent below its November 2021 high of $4,890.
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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.
