Following Bitcoin and other top coins, Ethereum is in red, bleeding at spot rates. In summary, Ethereum is down 20% from the May 2024 highs, easily breaking $3,300, as the Bears target is $3,000 in the short term.
Ethereum Down But Analysts Are Bullish: Here’s Why
However, amid this deluge of sellers, some analysts remain defiant, expecting prices to recover in the coming sessions. Specifically, QCP analysts said there are reliable bullish signals to consider coming from the options market. Interestingly, the surge in bullish bets comes amid the imminent approval of spot Ethereum exchange-traded funds (ETFs).
QCP analysts observed that options for Ethereum expiring in September and December are still attracting significant interest. Options give holders the right to sell or buy the underlying asset on expiry. The fee to hold the options can be traded at a huge premium or discount, depending on market conditions.
With more traders placing calls and betting on increasing prices, more are confident that ETH will shake off the current weakness and rip higher in the coming days.
QCP also points to the positioning of liquidation clusters for Bitcoin and Ethereum. In technical analysis, these clusters refer to key price levels where many shorts will be liquidated, forcing them to buy at a lower price and triggering a short squeeze.
QCP says the liquidation clusters in the top two assets are “heavily skewed to the topside.” Any price surge could trigger a short squeeze, providing relief to ETH holders and potentially exciting opportunities for others.
Eyes On The US SEC And Spot ETH ETFs
Optimism is also high as the crypto market prepares for the first spot in the Ethereum exchange-traded fund (ETF). According to analysts, the product could go live in mid-July, following the approval of 194-b forms in late May.
Bloomberg ETF analyst Eric Balchunas notes that the United States Securities and Exchange Commission (SEC) has set July 8 as the deadline for issuers to finalize their S-1 forms.
Once spot Ethereum ETFs begin trading, Matt Hougan, the chief investment officer of Bitwise, thinks billions will be poured into the asset. In a memo to investors, the executive predicts a staggering $15 billion to find its way to ETH within the first 18 months.
Beyond this, Hougan said ETH will benefit from regulatory clarity, especially in the United States, and rising adoption of stablecoins.