Ethereum Futures ETF Possible Approval: What's the Price?

Author: Ibrahim Ajibade, BeinCrypto Compiler: Shan Ouba, Golden Finance

Amid a subdued market, Ethereum (ETH) bulls managed to hold the $1,600 support this week. How will the price of ETH react in the short term to the recent media reports that the Ethereum futures ETF may be approved?

Ethereum (ETH) price rebounded to $1,700 immediately after Bloomberg reported, citing anonymous sources, that the SEC will approve multiple ETH futures ETF applications. The report points to applications from Wall Street heavyweights such as ProShares, Volatility Shares, Bitwise and Roundhill.

However, key on-chain analysis looks at how ETH price will react in the coming weeks.

Price-savvy whales are still dumping ETH in the market

On-chain data shows that Ethereum whales have not bought into Bloomberg’s recent bullish report. In fact, they continued to dump their holdings despite a modest rebound in prices on Friday after a strong sell-off.

As the chart below shows, Ethereum whales holding between 10,000 and 100,000 coins have been dumping on the market since mid-July. Apparently, between July 14th and August 18th, they dumped 1.12 million ETH.

With ETH currently trading at around $1,660, the whale dumped 1.12 million tokens worth $1.86 billion. It is worth noting that the recent trading patterns of this group of giant whales are closely related to the price trend of ETH. Unsurprisingly, while whale holdings fell by 4%, ETH prices also fell by 18% between July 14 and August 18. However, if the SEC's official statement confirms Bloomberg's recent report, it may convince them to end their selling spree.

Ethereum is now approaching oversold territory

Ethereum now appears to be slipping into oversold territory after a month-long selling spree by whales. According to Relative Strength Index data, Ethereum’s daily RSI closed at 14 on August 18. In simple terms, this means that 86% of ETH's daily price change over the past two weeks has been trending down.

Relative Strength Index data assesses the strength and momentum of an asset's current price trend. When the RSI breaks below the 30 level from above, it indicates that the asset is now oversold and a bullish reversal is likely. Strategic investors may interpret this as a signal to buy the dip, as ETH prices are expected to react positively in the coming days.

ETH Price Forecast: Bullish expectations may remain above $1,500

Investors looking to preempt a bullish reversal could offset the ongoing selling frenzy as the ETH RSI is now deep in oversold territory. This is also confirmed by the exchange’s on-chain Depth of Market graph showing the price distribution of currently active orders.

As the chart below shows, a strategic cryptocurrency trader has placed an order to buy 50,720 ETH if the price falls to $1,500. However, if the industry-wide bearish momentum picks up, it could push ETH prices to $1,400 before rebounding.

Instead, Ethereum bulls may react to the futures ETF approval report with an early attempt to reclaim the $1,900 milestone. However, as shown above, once the price hit $1,825, the crypto trader opened a sell order for 25,380 ETH. If there is not enough market demand, they may slow down the recovery process. If ETH breaks above this resistance, the bulls could push for the $1,900 target.