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While Bitcoin might experience a tranquil summer, Ethereum, often dubbed the King of Altcoins, is showing signs of potential turbulence.
QCP Capital has highlighted that Ethereum options are exhibiting significantly higher volatility compared to Bitcoin.
This indicates that, despite an expected market cooldown, Ethereum could witness a surge in trading activity over the coming months.
Current Market Performance
As of now, Ethereum is trading at $3,535, showing a modest increase of 0.65% in the last 24 hours, but a decline of 4% over the past week.
With a market cap of $424.8 billion, Ethereum firmly holds its position as the leading altcoin.
The trading volume in the last 24 hours stands at $15.9 billion, representing a notable 13% increase from the previous day.
Strategic Accumulation for Traders
QCP Capital has advised traders to consider accumulating Ethereum positions in preparation for what they term “the long, quiet summer” for Bitcoin.
This strategy could prove beneficial if Bitcoin’s volatility remains low while Ethereum rides the anticipated trend.
Potential Catalyst: Ethereum ETF Approval
A significant potential catalyst for increased Ethereum activity is the speculation surrounding the approval of a spot Ethereum Exchange Traded Fund (ETF) later this summer.
SEC Chair Gary Gensler recently informed Senator Bill Hagerty that Ethereum ETF S-1 filings are likely to get approved “over the course of the summer.”
The launch of a spot Ethereum ETF could drive the price to new all-time highs, surpassing the previous record of $4,878 set in November 2021.
Bullish On-Chain Data
On-chain data from CryptoQuant is currently painting a bullish picture for Ethereum.
Over $1.5 billion worth of Ethereum has been withdrawn from exchanges since June 9th.
Exchange reserves of ETH have decreased by 1.2 million ETH (over $4 billion) since late May.
This trend is often interpreted as investors pulling coins off exchanges to hold long-term rather than selling.
Technical Analysis and Price Trends
From a technical standpoint, ETH recently broke down from a bullish flag after hitting a high of $3,973 on May 27th.
This was followed by a drop and closure below the bullish flag, invalidating near-term bullish pressure.
Since then, the price has been trading bearish, appearing poised to find support at the demand zone marked on the chart after breaking out of the ranging channel impulsively on May 20th.
Support and Resistance Levels
Currently, the 50-day and 100-day exponential moving averages (EMAs) at $3,406 and $3,422, respectively, are acting as support for the price in the short term, while the 200-day EMA at $2,974 leaves room for further downside.
The 50-day and 100-day EMAs around $3,400 are also acting as resistance, suggesting potential volatility. Filling the fair value gap left on the breakout on May 20th is a possibility.
Read Also: Bonk, Pepe, & Stacks Surge: Crypto Gains Defy Market Trends!
Demand Zone and Fair Value Gap
Our focus remains on the demand zone, where the price is more likely to retrace, clearing liquidity and filling the significant fair value gap left after the ranging channel breakout on May 20th, before a strong bullish reversal is observed.
On-Chain Sentiments
On-chain data from Coinglass shows the ETH futures long-short ratio at 0.94, indicating a slightly bearish tone. However, data from TheBlock reveals a downtrend in new addresses appearing on the network, from over 144k in mid-May to below 100k in June, signaling a temporary loss of bullish momentum.
Outlook for Ethereum
With the potential approval of an Ethereum spot ETF, rising implied volatility, and bullish on-chain metrics, Ethereum is positioned for a potentially significant move this summer.
While Bitcoin might cool off, Ethereum, the king of altcoins, could be gearing up for its next major leap.
Conclusion
In conclusion, Ethereum’s market dynamics, coupled with the possibility of an ETF approval, suggest that traders and investors should closely monitor its movements.
The coming months could be pivotal for Ethereum, potentially leading to new highs and increased market activity.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial advice. Cryptocurrency investments are highly volatile and carry significant risk. Always conduct your own research and consult with a professional financial advisor before making any investment decisions.
