This ETF application had a tame impact on the price of Ether, with the cryptocurrency only climbing to $1,650 the following day. Moreover, the token has almost fully reversed the minor gains from the significant development.
A spot ETH exchange-traded fund is an investment vehicle that tracks the price of Ethereum on the spot market, allowing investors to buy and sell the crypto asset via a brokerage account. A product of this kind is expected to boost interest and investment in the Ether token.
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.
IntoTheBlock data shows that a total of 5.1 million ETH was acquired below the $1,600 mark to create support, while a total of 6.5 million ETH was purchased at a price above this level to establish resistance. The blockchain analytics firm concluded that traders agree to transact within a narrow range with a large concentration of ETH positions.
Additionally, IntoTheBlock believes that while bullish traders seemed to have bought the news, “discretionary sellers” overtook the narrative not too long after.
“A key factor behind the discretionary selling is likely to be FTX’s upcoming liquidation of reportedly $3B in crypto holdings,” the report read.
With the Ethereum and Solana tokens constituting a significant portion of FTX’s holdings, it is likely that the slow market performance of these assets is driven by traders being cautious because of the impending liquidation.