Ethereum (ETH) experienced a 0.5% decline on Tuesday as the Securities and Exchange Commission (SEC) postponed its verdict on BlackRock’s application to list and trade options contracts linked to the iShares Ethereum Trust (ETHA). Market participants had been optimistic about a favorable outcome, especially after the SEC recently approved spot Bitcoin ETFs. However, the delay has left investors feeling disappointed.
As a result of this decision, Ethereum ETFs reported a significant net outflow of $79.3 million on Monday—the largest since late July. This trend was exacerbated by an $80.6 million withdrawal from Grayscale’s ETHE, highlighting the waning institutional interest in ETH among traditional U.S. investors.
In addition, Ethereum could face increased selling pressure, with its exchange reserves rising. Over the past 24 hours, reserves increased by more than 100,000 ETH, a signal of potential selling, according to data from CryptoQuant.
A growing exchange reserve often indicates heightened selling potential, while a declining reserve suggests the opposite. Currently, ETH is trading around $2,660, reflecting a 0.5% decrease for the day. Over the last 24 hours, ETH has experienced liquidations exceeding $19.67 million, with long positions contributing $13.88 million and short positions accounting for $5.79 million.
Technical analysis shows ETH fluctuating within critical rectangle boundaries on the 4-hour chart, having rebounded off the $2,595 support level. Should this support hold, ETH may rally toward reclaiming the $2,817 level, which had served as significant support for over four months. However, it must first overcome a crucial resistance at $2,707, where it faced rejection on Monday.
Analysts at QCP Capital have observed that options data indicates a possible bullish trend amid rising market volatility. “The front-end skew for ETH has shifted from puts to calls, while ETH implied volatility is currently 9% higher than that of Bitcoin, suggesting both a positive sentiment and an expectation of increased volatility,” they stated.
Furthermore, the Relative Strength Index (RSI) and Stochastic Oscillator momentum indicators are positioned above neutral levels on the 4-hour chart, reinforcing a prevailing bullish sentiment.
However, a daily close below the $2,595 mark could prompt a bearish outlook or lead to continued consolidation. In the short term, ETH has the potential to rise to $2,671, which would liquidate positions valued at $51.73 million.
Related topics:
