Ethereum ETF approval sparks high sell pressure: Will ETH go below $3K?
It is now the third day since Ethereum [ETH] ETFs received regulatory approval and the second day of trading. ETH’s price action so far confirms that it is experiencing a “sell the news” reaction.
We previously explored the possibility of Ethereum ETFs possibly experiencing a similar outcome to what happened right after Bitcoin ETFs were approved.
The price embarked on a correction from the previous rally that was observed days before the approvals. So far Ethereum ETFs have followed a similar pattern.
ETH’s price traded at $3,177 at the time of writing, signaling that a wave of sell pressure was in effect. Its press time price was down by slightly over 10% since the ETFs were approved.
Prior to that, ETH traded at a 21% premium from its July lows after achieving a robust rally 15 days ahead of ETF approvals.
![Ethereum ETFs](https://ambcrypto.com/wp-content/uploads/2024/07/ETHUSDT_2024-07-25_09-34-30.png)
Source: TradingView
ETH’s indicators, especially the MACD confirmed that the bulls lost their momentum. It was also on the verge of flipping to negative. The strength of the volumes that we will observe in the next few days will determine whether ETH will extend its bearish momentum.
The RSI indicated that there was some room for more sell pressure since it was not yet oversold. Our analysis also confirmed that the next major support level for ETH was below the $2,900 level.
Whales on the hunt
The sell pressure that prevailed in the last three days suggests that whales might be taking advantage of incoming Ethereum ETFs liquidity.
Lookonchain data confirmed that Grayscale moved 140,044 ETH to Coinbase Prime in the last 24 hours. An amount worth almost $500 million. This was a confirmation that whales are contributing to the sell pressure.
Meanwhile, discounted ETH prices may already be attracting more buys on the way down. Looksonchain data also revealed that the BlackRock(iShares) Ethereum ETF added 76,669 ETH worth roughly $262 million to its wallet.
Long liquidations intensify
The bearish price action suggests that quite a number of net longs may have suffered. We confirmed this by evaluating the net longs on HyblockCapital’s heatmaps and here’s what we found.
Net longs peaked at nearly 50 million on 23rd July at around the $3,500 price level. The heat map indicates strong liquidation at that level, consequently pushing prices below $3,300 within the same trading session.