Ethereum at $4,000? ETF Spot Approvals Give Analysts Pause
According to analysts, market enthusiasm for ETH ETFs may not be as strong as most expected. Other market observers believe that ETH could surpass $4,000 following the launch of the ETF.
Doubts about the U.S. market for Ethereum [ETH] ETFs have been growing, even as analysts hold out for a possible launch in early July. In fact, there has been debate over whether ETH ETFs can attract demand on a similar scale as spot bitcoin [BTC] ETFs.
For perspective, according to Farside Investors, BTC-related products have now reached +$14 billion in net flows and more than $50 billion in assets under management (AUM) since their debut in January.
However, most analysts believe that ETH ETFs will only be able to meet a fraction of this demand. For example, Quinn Thompson, founder of crypto hedge fund Lekker Capital, recently highlighted the overall tepid market, claiming that “The market is fading the positive impact of the upcoming ETH ETF way too hard.”
Mixed Opinion on ETH ETFs
Analysts at JPMorgan are also part of the bearish camp. They recently forecast that ETH ETFs could attract between $1 billion and $3 billion in net inflows in the second half of 2024.
Another pessimistic figure was shared by Bloomberg ETF analyst Eric Balchunas, who predicted that products could only capture 20% of the BTC ETF market share. His forecast was based on the current demand for ETH versus BTC in the futures market.
In contrast, other analysts, such as Vetle Lunde of K33 Research, estimated that demand for ETH ETF products could reach $4 billion in net inflows in the first five months alone.
Bitwise CIO Matt Hougan, for example, is in the bullish camp and sees the second half of 2024 as full of “tailwinds” for ETH demand.
A recent report from Deribit Insights also painted a bullish future based on recent options data. It noted the following:
“Decent clip of ETH Sep 4k Calls bought ($12m premium), and BTC Jun 65k+July75k Calls rolled to increased exposure in Dec 75+90k Calls, showing increased mid-term optimism. Early trades in the last few hours supporting range lows with Sep 60k Puts sold, and Jun RR Calls bought.”
Analysts at QCP Capital reiterated this optimism based on options data and reiterated that “Despite uncertainty around the reception of the ETH ETF, capturing 10-20% of Bitcoin ETF flows could propel ETH above 4,000, nearing its peak of 4,800.”
Ethereum Forecast
According to CryptoPredictions, Ethereum started in June 2024 at $3,761.069 and is predicted to finish the month at $3,068.944. During June, the maximum forecasted ETH price is $3,948.463 and the minimum price is $2,684.955.
The ETH price for today (24/06/2024) is predicted to be in the range of $2,975.748 – $4,376.101. Ethereum is predicted to end today at $3,500.881.
Ethereum is consolidating for now, but is looking to break above $3,582. Securing the latter as a support level would allow a rebound to $3,700. Recovering this level as a support floor would allow the cryptocurrency to recoup its recent losses.
This would also result in the Ethereum price securing the 50% Fibonacci retracement line as support.
However, if the breakout fails and the cryptocurrency continues to consolidate, ETH may continue to trade sideways. If the broader market downtrend leads to a break below the $3,459 support level, the bullish thesis would be invalidated. ETH could then fall to the 38.2% Fib line at $3,336.
By Leonardo Perez