Articles

Mexican Peso rallies Friday, ends June with over 7% losses

399268   June 30, 2024 23:49   FXStreet   Market News  

• Mexican Peso rebounds to 18.24 vs. US Dollar following Banxico’s decision to maintain 11.00% rate.
• Decision aligned with recent inflation data, targeting 3% inflation by Q4 2025.
• Inflation risks heightened by service sector, cost pressures, Peso fall and geopolitical tensions.

The Mexican Peso recovered ground against the US Dollar and rallied more than 1% on Friday after the Bank of Mexico (Banxico) decided to keep rates unchanged due to “idiosyncratic factors” and the Peso’s depreciation following the June 2 general election results. Although the USD/MXN trades with losses of 0.73% at 18.30 during the day, ends the week and month with gains of 1.19% and 7.72%, respectively.

Banxico left a lifeline to the battered Peso on Thursday, holding rates at 11.00% after inflation reaccelerated, according to JuneÂ’s mid-month inflation data.

The Mexican institution expects headline inflation to converge to the bankÂ’s 3% target by Q4 2025 and acknowledged that inflation risks are skewed to the upside due to high services inflation, cost pressures, Mexican Peso depreciation and geopolitical conflicts.

Across the border, the US Federal ReserveÂ’s (Fed) preferred inflation gauge came as expected by the consensus, showing an improvement in headline and core Personal Consumption Expenditures (PCE) Price Index.

The data failed to underpin the Greenback, which remains pressured, losing some 0.16% as revealed by the US Dollar Index (DXY). Therefore, the USD/MXN might continue on the back foot toward the remainder of the day as sellers eye an April 19 high of 18.15.

Daily digest market movers: Mexican Peso strengthens after Banxico hold

• BanxicoÂ’s decision was not unanimous and was perceived as dovish as Deputy Governor Omar Mejia Castelazo opted for a quarter of a percentage rate cut.
• MexicoÂ’s central bank monetary policy statement highlighted the Governing Board expects the disinflation process to evolve and added that “Looking ahead, the board foresees that the inflationary environment may allow for discussing reference-rate adjustments.”
• A Citibanamex survey showed economists priced out fewer rate cuts by the central bank. They also revised the Gross Domestic Product (GDP) for 2024 downward from 2.2% to 2.1% YoY and expect the USD/MXN exchange rate to finish the year at 18.70, up from 18.00 previously reported.
• US PCE was lower than AprilÂ’s 0.3% and was 0% MoM as expected. Core PCE expanded by 0.1% MoM as estimated, which is also beneath the previous reading of 0.3%.
• US Consumer Sentiment final reading for June of 68.2 deteriorated compared to MayÂ’s 69.1, yet improved as the preliminary reading was 65.8. Inflation expectations remained steady in the short and long periods at 3%.
• CME FedWatch Tool shows odds for a 25-basis-point Fed rate cut at 59.5%, unchanged from the previous day.

Technical analysis: Mexican Peso climbs as USD/MXN tumbles below 18.30

The USD/MXN is undergoing a pullback after hitting a daily high of 18.59 earlier in the day, opening the door to challenging key support levels. From a momentum standpoint, sellers are gathering some steam. This is depicted by the Relative Strength Index (RSI) pointing downward though still remaining bullish, suggesting the pullback could be short-lived.

For a bearish continuation, sellers need to reclaim the April 19 high turned support at 18.15, which would pave the way toward 18.00. The next support would be the 50-day Simple Moving Average (SMA) at 17.37 before testing the 200-day SMA at 17.23.

On the other hand, if buyers achieve a decisive break above the psychological 18.50 level, the next stop would be the year-to-date (YTD) high of 18.99, followed by the March 20, 2023, high of 19.23.

Over 1 million people hold at least one Bitcoin, hereÂ’s where BTC is headed

399265   June 30, 2024 23:45   FXStreet   Market News  

• Data shows over 1 million wallet addresses hold a minimum of one Bitcoin as of June 30, per Glassnode data. 
• Nearly 82% of Bitcoin holders are currently profitable as BTC holds steady above $61,500. 
• Bitcoin faced a choppy week, analysts predict a BTC bull run.

Bitcoin (BTC) wallet addresses holding at least one Bitcoin has crossed 1 million, per Glassnode data on June 30. Majority of BTC holders are profitable at the current price and analysts predict a bull run in the largest asset by market capitalization. 

Bitcoin on-chain data shows rise in BTC ownership, unrealized gains

Glassnode data shows a consistent increase in the number of wallet addresses holding at least one Bitcoin. Over a million wallets hold at least one Bitcoin, fueling a bullish thesis for the largest cryptocurrency. 

Bitcoin: Number of addresses with balance greater than 1 BTC

Data from IntoTheBlock shows that nearly 82% of the wallet addresses are currently profitable as BTC sustains itself above $61,500. 16.16 million Bitcoins are currently being held in wallet addresses with unrealized gains. 

Bitcoin wallets with unrealized gains

While it is likely that holders take profits, profit-taking activities in the past few months have failed to negatively impact Bitcoin price. 

Analysts predict a bull run in Bitcoin

Quinten Francois, an analyst and trader evaluated the Bitcoin price trend and noted that 71 days post the halving event, BTC is on track for a 2016-2017 style bull run “on steroids.” The analyst’s thesis is backed by Bitcoin’s gains in the previous post-halving cycles. 

Data shows that Bitcoin has noted gains every cycle in similar timelines. Analyst behind the X handle @therationalroot identifies Q3 as a key time for Bitcoin price gains. 

Bitcoin trades at $61,670 at the time of writing, the asset is likely headed towards $63,943. 

Ethereum and Polygon dominate cryptoÂ’s institutional investments, what that means for traders

399263   June 30, 2024 20:33   FXStreet   Market News  

• Ethereum and Polygon ecosystems host a majority of institutional funds and treasury products, deployed in the past few years. 
• Institutional participation is considered bullish for crypto tokens and the ecosystem, as it drives demand and boosts utility. 
• ETH and MATIC prices dropped nearly 4% in the week. 

The second largest crypto ecosystem Ethereum (ETH) and scaling protocol Polygon (MATIC) have noted a rise in institutional investment with the recent launches of crypto-related products. The Ethereum and Polygon ecosystems therefore dominate the investing landscape, likely boosting the utility of tokens in the networks. 

Ethereum and Polygon emerge as institutionÂ’s favorites?

Data from the tracker behind the X handle @rwa_xyz suggests that a majority of institutional funds and treasury products are being deployed on Ethereum and Polygon. Market participants were initially skeptical of capital from institutional investors, however, the landscape has changed and these two networks have emerged as the dominant ones. 

Top crypto treasury products 

The total value of assets locked (TVL) in Polygon has crossed $832 million per DeFiLlama data. With new updates and launches from the Polygon network, the arrival of the AggLayer and plans for a POL token, there is a rise in the project’s relevance among traders. 

The catalyst driving Ethereum is the optimism surrounding the launch of the upcoming Spot Ethereum ETF product, its approval by the US Securities and Exchange Commission (SEC). 

At the time of writing, ETH and MATIC wiped out nearly 4% of their value in the past week. ETH trades at $3,364, hovering close to key support at $3,400. MATIC is trading at $0.5478, and the price of the Layer 2 token is nearly unchanged in the past 24 hours. 

What to expect from Ethereum and PolygonÂ’s dominance?

Market participants can expect new projects and protocols in the Polygon ecosystem with news of a $50 million web3-focused fund launched by MATIC co-founder Sandeep Nailwal and Cere Network co-founder Kenzi Wang. 

The introduction of Polygon’s AggLayer solves the liquidity fragmentation problem for traders and protocols in the crypto ecosystem. 

Weekly Market Outlook (01-05 July)

399262   June 30, 2024 17:56   Forexlive Latest News   Market News  

UPCOMING EVENTS:

• Monday: China
  Caixin Manufacturing PMI, Swiss Retail Sales, US ISM Manufacturing PMI.
• Tuesday: RBA
  Meeting Minutes, Eurozone CPI, Eurozone Unemployment Rate, Canada
  Manufacturing PMI, US Job Openings, Fed Chair Powell.
• Wednesday:
  Australia Retail Sales, China Caixin Services PMI, Swiss Manufacturing
  PMI, Eurozone PPI, US ADP, US Jobless Claims, US ISM Services PMI, FOMC
  Meeting Minutes.
• Thursday: US
  Holiday, Swiss Unemployment Rate, Swiss CPI, ECB Meeting Minutes, Canada
  Services PMI, UK General Election.
• Friday: Eurozone
  Retail Sales, Canada Labour Market report, US NFP.

Monday

The US ISM Manufacturing PMI is expected
at 49.0 vs. 48.7. We got a great S&P
Global US Manufacturing PMI which increased
to 51.7 vs. 51.3 prior and overall the data highlighted the fastest economic
expansion for over two years, hinting at an encouragingly robust end to the
second quarter while at the same time inflation pressures have cooled.

The survey also brought welcome news in
terms of job gains, with a renewed appetite to hire being driven by
improved business optimism about the outlook. Selling price inflation has
meanwhile cooled again after ticking higher in May, down to one of the
lowest levels seen over the past four years. Historical comparisons
indicate that the latest decline brings the surveyÂ’s price gauge in line
with the FedÂ’s 2% inflation target.

Tuesday

The Eurozone CPI Y/Y is expected at 2.5%
vs. 2.6% prior, while the Core CPI Y/Y is seen at 2.8% vs. 2.9% prior. This
report wonÂ’t change anything for the ECB as they want to see the data
throughout the summer before deciding on a rate cut in September.

Nonetheless, a faster easing in inflation
during the summer or some quick deterioration in the economy should see the
market pricing in more rate cuts by the end of the year. At the moment, the
market sees 46 bps of easing by the end of the year assigning 61% probability of no
change at the July meeting and 83% chance of a cut in September.

The US Job Openings are expected to fall
to 7.850M vs. 8.059M prior. The last
report missed expectations by a big margin
with job openings falling to the lowest level since February 2021 and now
getting close to the pre-pandemic level.

This is good news for the Fed as the
labour market continues to rebalance via less jobs availability rather than
more layoffs, and inflationary pressures should keep abating. On the other
hand, the labour market is a spot to keep an eye on carefully in this part of
the cycle.

We will also hear from Fed Chair Powell
whoÂ’s speaking at the European Central Bank Forum on Central Banking 2024 in
Sintra, Portugal. I donÂ’t expect him to signal anything and just maintain the
usual neutral stance.

In my opinion, a lot will depend on the
next inflation data. I think the Fed will be more dovish if we get a good
inflation report in July. Then, if we get some more good figures in August,
Powell will likely pre-commit to a rate cut in September at the Jackson Hole
Symposium.

Wednesday

The US Jobless Claims
continue to be one of the most important releases to follow every week as itÂ’s
a timelier indicator on the state of the labour market. Initial Claims keep on
hovering around cycle lows, while Continuing Claims have been on a sustained
rise recently with the data setting a new cycle high last week. This is
something to keep an eye on. This week Initial Claims are expected at 235K vs.
233K prior, while thereÂ’s no consensus for Continuing
Claims at the time of writing.

The US ISM Services PMI is expected at 52.5
vs. 53.8 prior. This survey hasn’t been giving any clear signal lately. As previously
mentioned, the S&P
Global US PMIs surprised to the upside
with the Services measure in particular showing a strong rise. The focus
will likely be on the employment sub-index ahead of the NFP report but the data
we got until now suggests that the US economy is doing well, and the labour
market remains resilient.

Thursday

The Swiss CPI Y/Y is
expected at 1.4% vs. 1.4% prior, while the M/M measure is seen at 0.1% vs. 0.3%
prior. As a reminder, the SNB cut interest
rates by 25 bps to
1.25% at the last meeting and lowered its inflation forecasts. The SNB also
added the line that says “will be ready to intervene in the FX market if needed
and as necessary”, so if inflation surprises to the upside in Q3 or they see
risks of inflation overshooting their projections, then we will likely get some
interventions.

For context, the central
bank expects inflation to pickup slightly and average 1.5% in Q3, so this is
going to be the baseline and if inflation were to surprise to the downside,
then the market will price in higher chances of another rate cut in September.
At the moment, the market expects just one more rate cut in 2024 and the
probability of a rate cut in September stands at 62%.

Friday

The US NFP is expected to
show 180K jobs added in June vs. 272K in May
and the Unemployment Rate to remain unchanged at 4.0%. The Average Hourly
Earnings M/M is expected at 0.3% vs. 0.4% prior. The Fed at the moment is
very focused on the labour market as they fear a quick deterioration.

As a reminder, they
forecasted the unemployment rate to average 4% in 2024, so I can see them
panicking a bit and deliver a rate cut if unemployment rises to 4.2% in the
next couple of months. For now, the data suggests that the labour market is
rebalancing via less hires than more layoffs and overall, there are no material
signs of deterioration.

The Canadian labour market
report is expected to show 25K jobs added in June vs. 26.7K in May and the Unemployment
Rate to tick higher again to 6.3% vs. 6.2% prior. The last
report surprised to the upside although we got another uptick in the unemployment
rate. The key part was wage growth jumping to 5.1% vs. 4.7% prior, which is
what the BoC is most focused on.

As a reminder, the last
week the Canadian
CPI surprised to the upside, with the underlying inflation measures rising
but remaining within the 1-3% target band. This made the market to pare back
rate cuts expectations with the probabilities now standing around 50%. We will
get another inflation report before the next BoC policy decision, but if we see
another jump in wage growth, then the central bank will likely need very good
CPI figures to deliver a rate cut in July.

Crypto token unlocks worth over $730 million in July: DYDX, SUI, ARB, AXS, APE among top assets

399260   June 30, 2024 17:33   FXStreet   Market News  

• Crypto token unlock events in July are likely to flood the market with over $730 million in assets. 
• DYDX, SUI, Arbitrum, Axie Infinity and ApeCoin rank among the top assets with scheduled unlocks in July. 
• Large scale token unlocks typically push prices lower. 

Crypto tokens valued at upwards of $730 million are set to be unlocked in July 2024. The vesting period for nearly 40 crypto tokens is coming to an end in the coming month. 

During the vesting period, crypto token holders are shielded from the impact of mass sell-off since investors and team members are held back from selling their assets through a lock down, or “vesting.”

Crypto token unlocks lined up for July

Data from token tracker TokenUnlocks shows dYdX (DYDX), Sui (SUI), io.net (IO), Xai (XAI), ImmutableX (IMX), Aptos (APT), Starknet (STRK), Arbitrum (ARB), Axie Infinity (AXS), ApeCoin (APE), Pixels (PIXEL), Worldcoin (WLD), Altlayer (ALT) are set to unlock over $730 million in July 2024. 

ALT unlock exceeds $120 million, the tokens will be distributed to the team, consultants and investors. WLD begins unlocking 6.62 million tokens a day, starting July 24. 

The following chart shows the date and the amount of unlock. 

Large token unlocks in July 

The unlocked tokens represent between 1.68% and 71.59% of the circulating supply. Typically an unlock of over 3% of the circulating supply is expected to have an impact on the asset’s price. 

APT traders have shed their token holdings as Aptos wipes out over 25% of its value this month. Aptos could present sidelined traders the opportunity to buy the token unlock dip. At the time of writing, APT trades at $6.81, down nearly 2% on Sunday. 

The $76.08 million Arbitrum token unlock could usher a correction in the DeFi token. ARB erased nearly 4% of its value in the past week, the asset is trading at $0.7747 at the time of writing.

What to expect from the unlock?

The high volume token unlocks can usher volatility in asset prices and assets could offer a buy-the-dip opportunity to sidelined buyers. Specifically, of all the tokens lined up for unlock, SUI, XAI, IMX, APT, ARB and ALT could suffer a decline. 

Sidelined buyers could scoope up the tokens at relatively lower prices, close to the unlock or post the event. 

Canadian Dollar finds thin gains on Friday after Canadian GDP rebounds

399257   June 30, 2024 09:40   FXStreet   Market News  

• Canadian Dollar bolstered by rising market sentiment.
• Canada posted a 0.3% uptick in GDP, propping up CAD.
• US PCE inflation also ticked lower, further bolstering rate cut hopes.

The Canadian Dollar (CAD) found some room on the high side on Friday, pushing up by a scant tenth of a percent against the US Dollar amid choppy intraday price action after key economic data broadly met market expectations. Canadian Gross Domestic Product (GDP) ticked higher and US Personal Consumption Expenditure Price Index (PCE) inflation figures cooled slightly.

Canada posted a slight gain in GDP growth in April, rebounding from the previous monthÂ’s flat print. A stacked US data docket also generally met market expectations, though US Personal Spending failed to meet expectations despite a post-revision improvement.

Daily digest market movers: Canadian GDP rebounds, US inflation continues to ease for now

• Canadian MoM GDP posted a 0.3% increase in April, meeting market expectations and recovering from the previous monthÂ’s 0.0%.
• US PCE Price Index inflation also eased to 2.6% YoY in May, meeting market forecasts and cooling from the previous 2.8%.
• Market bets of a September rate cut from the Federal Reserve (Fed) have ticked higher post-PCE. According to the CMEÂ’s FedWatch Tool, rate markets are pricing in 66% odds of at least a quarter-point rate trim from the Fed on September 18, up from a flat 60% pre-PCE inflation.
• University of Michigan (UoM) 5-year Consumer Inflation Expectations also ticked down to 3.0% in June, down from previous 3.1%.
• UoM Consumer Sentiment Index for June also surged to 68.2 from 65.6, vaulting over median market forecasts of 65.8.

Technical analysis: Canadian Dollar recovers ground on Friday, sends USD/CAD into familiar levels

The Canadian Dollar found a bid on Friday, gaining ground against the majority of its major currency peers as markets get set to wrap up a relatively sedate trading week. The CAD gained around one-tenth of one percent against the US Dollar on Friday and climbed nearly one-quarter of one percent against the broadly-battered Japanese Yen.

USD/CAD briefly found a fresh high for the week near 1.3735 early Friday before settling back into familiar near-term lows near 1.3675. CAD strength has briefly halted a recent upswing in the pair on a Greenback bid, sending USD/CAD into a rough near-term corkscrew around the 200-hour Exponential Moving Average (EMA) near the 1.3700 handle.

USD/CAD hourly chart

USD/CAD daily chart

US Dollar closed the week soft, focus is now on labor market data

399256   June 30, 2024 09:35   FXStreet   Market News  

• US Dollar saw a slight dip at the end of the week, clearing daily gains.
• US Dollar finds support amid high US Treasury yields.
• MayÂ’s PCE data showed an unexpected deceleration in US inflation.

The end of the week saw the US Dollar, as benchmarked by the DXY Index, settle near 105.80, after hitting a high of 106.13 earlier in the session. This follows the release of Personal Consumption Expenditures (PCE) data, but the losses are limited by the high US Treasury yields.

The American economy remains resilient with slight inflationary signals, which is just enough to keep the Federal Reserve (Fed) from completely embracing the easing cycle.

Daily digest market movers: US Dollar dips on weak PCE data

• On Friday, MayÂ’s Personal Consumption Expenditures (PCE) showed headline inflation soften to 2.6% YoY, down from the previous monthÂ’s 2.7%.
• Core PCE (which excludes volatile food and energy prices) has also experienced a decline to 2.6% from the previous 2.8% in April.
• US Treasury yields provide resilience to the Dollar, with the 2, 5 and 10-year rates at 4.71%, 4.32%, and 4.33%, respectively.
• Probability of a Fed rate cut in September marginally increased to 66%, up from the pre-release expectation of 64% as per CME Fedwatch Tool.
• Focus will now shift to labor market data from June.

DXY technical outlook: Positive momentum persists, index eyeing higher grounds

Despite the recent data fluctuations, the technical outlook remains positive, with indicators in green but losing some steam. The Relative Strength Index (RSI) continues to be above 50 but appears to point downward, indicating a slight pause in the bullish momentum. The green bars are still developing in the Moving Average Convergence Divergence (MACD), further facilitating the positive view but at a slower pace.

The DXY Index holds above the 20, 100 and 200-day Simple Moving Averages (SMAs), confirming its ongoing positive stance. Despite the IndexÂ’s steadiness at the highs seen since mid-May, there is room for further rise, suggesting the DXY is poised for further upside with the 106.50 zone next in sight. Conversely, 105.50 and 105.00 will be areas to observe in case of a drawdown.

China NBS Non-Manufacturing PMI registered at 50.5, below expectations (51) in June

399255   June 30, 2024 09:33   FXStreet   Market News  

China NBS Manufacturing PMI meets forecasts (49.5) in June

399254   June 30, 2024 09:33   FXStreet   Market News  

AAVE TVL climbs past $12 billion, DeFi token crosses $95

399251   June 30, 2024 02:33   FXStreet   Market News  

• AAVE total value locked in the chain has crossed $12.34 billion, per DeFiLlama data. 
• AAVE added nearly 17% to its value this week, surged to $95.63 on Saturday. 
• The DeFi token dominates the crypto lending sector with 41% share. 

AAVE, the token of an Open Source protocol has surged to $95 on Saturday, June 29. The protocol dominates the crypto lending sector, and the total value of assets locked (TVL) has climbed past $12.34 billion per DeFiLlama data. 

AAVE dominates crypto lending, extends gains

DeFiLlama data shows that AAVE’s TVL has hit $12.34 billion, up from $6.84 billion on January 2. The rise in TVL can be attributed to the growing market share of the protocol in lending and utility among market participants. 

AAVE TVL on DeFiLlama 

TokenTerminal data shows that 41% of the crypto lending market is dominated by the DeFi protocol AAVE. The project has noted a surge in its popularity and mentions across social media platforms in 2024. 

The chart below ranks the top 20 projects in the crypto lending sector, based on market capitalization. AAVE dominates the chart between July 2023 and June 2024 capturing over 40% in market capitalization. 

Crypto lending protocols market cap

A proposal for a series of upgrades to the AAVE chain, including AAVE V4, Aave Network, a cross-chain liquidity layer, non-EVM Layer 1 deployments and a fresh visual identity has reached Quorom. 

2024 has been a year of positive developments for the DeFi token. Statistics from OurNetwork show that AAVE revenue climbed from $600,000 to nearly $1 million. The total fees collected by the DeFi protocol reached $160 million, so far in 2024. 

At the time of writing, AAVE price is $95.40, yielding nearly 2% gains on the day. 

Coinbase Chief Legal Officer says SEC and Chair Gary Gensler blocked the reveal of key documents

399250   June 29, 2024 23:33   FXStreet   Market News  

• Coinbase Chief Legal Officer Paul Grewal said Chair Gensler and SEC seek to prevent key documents from coming to light. 
• Grewal said the exchange has asked SEC Chair to produce documents concerning communication on regulation of crypto exchanges. 
• CoinbaseÂ’s legal battle with SEC persists, the exchange is taking US regulators to court through an intermediary. 

Coinbase, one of the largest cryptocurrency exchanges, is embroiled in a legal battle with US financial regulator, Securities and Exchange Commission (SEC). 

In its battle, Coinbase has accused the regulatory agency and Chair Gary Gensler of improperly blocking access to documents relevant to the case. 

Coinbase CLO says Gary Gensler and the SEC improperly blocked documents

Coinbase Chief Legal Officer (CLO) Paul Grewal’s recent tweet shows that the exchange is seeking documents tied to two digital assets that have been settled previously. One involves Zachary Coburn, the founder of the EtherDelta platform, the SEC deemed it as “digital asset securities” in 2018.

The second is focused on Enigma MPC, a blockchain firm that sold $45 million in ENG tokens, the SEC marked these tokens as unregistered securities. 

Grewal said in a post on X that the exchange has asked the agency for documents on the closed investigations to reveal the SEC’s views. Grewal notes that one of the investigations shows the SEC publicly announcing that Ether is not a security in 2018 and the other investigation has been closed for years. 

The SEC has improperly blocked the exchange’s request for the documents and stonewalled attempts to retrieve them. 

Through its intermediaries, the crypto exchange has filed a lawsuit against US regulators, taking them to court over the Freedom of Information Act requests. 

Ethereum long-term holders could play major role in ETH’s price movement in coming weeks

399246   June 29, 2024 20:40   FXStreet   Market News  

• Ethereum long-term holders now own 78% of ETH’s total supply.
• Spot Ethereum ETF issuers have begun marketing their products with a potential “tech play” move in the cards.
• Ethereum options data shows reduced volatility as ETH looks set to reach a new yearly high.

Ethereum (ETH) is down 2% on Friday following increased holdings among long-term holders and ETH ETF issuers launching marketing campaigns for their products. Meanwhile, ETH options data reveals key price dynamics that may see ETH reaching the $4,000 price level in the coming weeks.

Daily digest market movers: ETH long-term holders, ETH tech play

ETH long-term holders (LTHs) may play a major role in determining the direction of its price in the coming months. This is revealed in the ETH Balance by Time Held chart, which shows that 78% of ETH supply is held by LTHs, according to data from IntoTheBlock.

ETH Balance by Time Held

LTHs are typically interpreted as addresses that have held onto their tokens for over a year. Historically, heavy selling pressure from LTHs often signifies the peak of a bull cycle.

Considering that ETH LTHs’ holdings are growing, ETH could still see considerable price growth in the current cycle.

As earlier reported, LTHs may be anticipating higher prices from the upcoming launch of spot Ethereum ETFs. This is unlike Bitcoin LTHs, which have continued to shed their holdings since the beginning of the year.

Meanwhile, spot ETH ETF issuers have stepped up their marketing efforts. Asset manager VanEck seems to be leaning toward the decentralized applications side of the top smart contract blockchain. In a recent tweet on X, VanEck said, “Ethereum is like an open-source app store.”

This follows a series of marketing videos from Bitwise comparing Ethereum against “Big Finance.” BitwiseÂ’s Ryan Rasmussen stated that Ethereum may resonate more with Wall Street than Bitcoin. “Why? Well, most investors don’t own gold. But almost every investor owns tech,” he said.

ETH technical analysis: Ethereum could reach a new yearly high following insights from key options data

Ethereum traded around $3,390 on Friday, down 2% in the past 24 hours. ETH has seen about $24.84 million in liquidations, with long liquidations accounting for 81% and shorts for 19%.

According to Greekslive data, over 1.04M ETH options expired on Friday with a Put/Call Ratio (PCR) of 0.59, a Max Pain point of $3,100 and a notional value of $3.6 billion.

Options are derivative instruments that give you the right to buy (call) or sell (put) an underlying asset based on predetermined prices at a specific date.

While many expected the options expiry to cause high volatility for ETH today, its price has remained relatively unchanged in the past 24 hours. This aligns with ETH’s implied volatility (IV), which is at a low level, sitting below 60% for all major terms.

“It will be a cost-effective option to buy some call options while the IV is low,” said Greekslive.

ETH Deribit Options Open Interest

Additionally, Deribit’s exchange PCR has fallen to 0.27 from around 0.36 earlier in the month, according to data from Coinglass. This suggests most traders are bullish, especially with the potential launch of spot ETH ETFs. The $4,000 price level is key to watch out for as it’s the strike price of over $420 million worth of calls on Deribit. 

While ETH looks set to follow a horizontal trend over the weekend, it may begin to see gains as the spot ETH ETF news saturates the market.

ETH/USDT 4-hour chart

ETH has to overcome the $3,629 resistance — a level it has failed to sustain a move above in the past three weeks — before it could see a further move up. A successful, sustained move above this level could see ETH rise more than 18% to test the resistance of $4,093 and potentially reach a new yearly high.

The $3,203 level may prove a crucial support for the bullish run. A breach below this level would invalidate the bullish thesis, potentially causing ETH to face a major correction.