The price of Ethereum appears to be influenced by the current market sentiment once again, despite experiencing a relatively positive week. On September 6, Ark Invest filed for the first Ethereum spot exchange-traded fund (ETF) in the United States.
Although this ETF application had a limited impact on the price of Ether, the cryptocurrency managed to reach a peak of $1,650 the day after. However, it is worth noting that the token has since retraced most of the minor gains made as a result of this significant development.
Ethereum Price Unaffected by Ark's ETF Application Ethereum Price Registers 0.1% Rise Last Week – Here’s Why
According to CoinGecko data, Ethereum is currently trading at around $1,628, with a slight 0.1% increase in price over the last seven days. This indicates the challenging market performance of the second-largest cryptocurrency. Ethereum Price Unaffected by Ark's ETF Application
A spot ETH exchange-traded fund is an investment vehicle that tracks the Ethereum price on the spot market, enabling investors to purchase and sell the crypto asset through a brokerage account. Such a product is expected to increase interest and investment in the Ether token.
Despite the optimistic news, the price of ETH has remained relatively unchanged this week. A recent report by blockchain analytics firm IntoTheBlock has shed light on the reasons why this news had little impact on the Ethereum price.
‘Supply & Demand Balance’
According to the data analytics platform, the current supply and demand balance is one of the primary reasons why the ETH price continues to move sideways. “Large holdings are concentrated close to ETH’s current price, consolidating prices in a tight range,” IntoTheBlock said.
According to IntoTheBlock's data, approximately 5.1 million ETH was purchased below the $1,600 mark to establish support, while around 6.5 million ETH was acquired at a price above this level to create resistance. The blockchain analytics firm has inferred that traders are currently agreeing to transact within a narrow range, with a significant concentration of ETH positions.
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‘Automated Buying, Discretionary Selling’
Furthermore, IntoTheBlock suggests that although bullish traders initially reacted positively to the news, they were soon overshadowed by "discretionary sellers." The report indicates that a major factor contributing to this selling pressure is FTX's plan to liquidate approximately $3 billion worth of crypto assets. While FTX has not yet disclosed the exact timing of these liquidations, recent activity in the exchange's wallets has raised concerns in the market.
This sentiment appears to have influenced the performance of SOL as well, following the announcement that global payment giant VISA will utilize the Solana network for payment settlements. While the value of SOL initially surged by over 5% to trade above $20, it has since retraced and is now trading below $19.5.
Given that Ethereum and Solana tokens make up a significant portion of FTX's holdings, it is plausible that the cautious market performance of these assets is a result of traders anticipating the impending liquidation.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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