The long-awaited approval of the first American spot Ethereum ETF is finally a fact. This major event has roiled the crypto market, and investors and analysts are closely monitoring the impact on the price of Ethereum (ETH) and other altcoins. Let’s take a closer look at the current situation and the possible scenarios for ETH after this approval.

Ethereum ETF Approval: What Does This Mean?

The approval of an ETF for ETH is a significant milestone as it provides institutional investors with a regulated and accessible way to invest in Ethereum. This could lead to a significant increase in demand and a positive impact on the price of ETH. However, the market reaction so far shows that we may have seen a ‘buy the rumor, sell the news’ event.

Comparison with Bitcoin ETF approval

To better understand the current situation, we can look at what happened when the BTC ETF was approved. BTC was then in the ‘golden pocket’ of the Fibonacci retracement level. After approval we saw a classic “buy the rumor, sell the news” scenario, where the price rose on the rumors and then fell after the actual approval.

Current situation of ETH

ETH is currently in a different position than BTC was at the time. ETH has already passed the golden pocket and is approaching the 0.854 Fibonacci retracement level, a key resistance level that has not yet been reached. This means that market dynamics may be different than BTC, and the market’s reaction to the approval of the ETH ETF may also be different.

Analyse ETH

Overall, we are right on schedule in terms of timing when we compare the current cycle to the previous one. If we superimpose the previous cycle on the current one, we see that we make the same movements at the same times. This pattern suggests that ETH is in a similar uptrend as in previous bull markets.

On the attached chart you can see how ETH is currently moving in relation to the Fibonacci levels. The price is approaching the 0.854 Fibonacci retracement, which is a crucial level to keep an eye on.

Price target

Based on current technical analysis and historical patterns, I am looking at a target at the 1,618 Fibonacci extension, which is around $7,400. This level represents significant upside potential and is a common target in bullish markets after a consolidation period.

Possible scenarios after ETF approval

  1. ‘Buy the rumor, sell the news’: As some analysts speculated, ETH’s price may rise leading up to the approval and then fall after the announcement. This scenario is similar to what we saw with the BTC ETF approval and seems to be manifesting itself again.
  2. Continuing the bullish trend: If the approval is seen as a strong bullish signal, ETH’s price could continue to rise, especially if institutional investors start getting in. This could also positively impact other altcoins, including SOL.
  3. Little to no influence: There is also a possibility that the approval will have little to no direct impact on the price of ETH, especially if the market had already priced in the approval. In this case, we may see more sideways movement pending further market catalysts.

Conclusion

The approval of the ETH ETF has led to a mixed market reaction, with some signs pointing to a “buy the rumor, sell the news” scenario. ETH should now form a higher low and build a solid foundation for the next upward move. The current support level and support around $64K are crucial to keep an eye on. BTC.D and TOTAL2/3 remain key indicators of broader market sentiment.

With current technical indicators and market structure, ETH looks poised for significant upside, with a potential target of $7,400. Investors and traders should keep a close eye on these signals as they are indicative of potential future price movements.

Disclaimer: The analyzes above are based on technical patterns and trends in the crypto market. It is critical to emphasize that this information is not intended as financial advice. Cryptocurrency investments inherently involve risk and are subject to volatility. Before making investment decisions, it is recommended that you do your own research, seek financial advice and only invest what you can afford to lose.

Source: https://cryptobenelux.com/2024/05/25/ethereum-etfs-zijn-een-feit-maar-wat-is-het-effect-op-altcoins/



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