Ethereum ETFs poised to defy market underpricing

• 
  Ethereum
  investors
  are
  underpricing
  the
  impact
  of
  spot
  ETH
  ETF
  launch,
  says
  K33
  Research.
• 
  Grayscale’s
  moves
  to
  reduce
  potential
  outflows
  for
  ETHE
  upon
  its
  ETF
  conversion.
• 
  Ethereum
  could
  face
  sell-off
  if
  key
  indicator
  declines
  further.

Ethereum
(ETH)
is
up
2%
on
Tuesday
following
predictions
from
K33
Research
that
investors
are
underpricing
the
upcoming
ETH
ETF
launch.
Meanwhile,
Grayscale
is
making
moves
to
reduce
potential
outflows
from
its
Grayscale
Ethereum
Trust
through
its
Ethereum
Mini
Trust.

Daily
digest
market
movers:
Underpriced
ETH
ETF,
Grayscale’s
Mini
Trust
move

Ethereum
has
been
the
most
popular
crypto
among
traders
in
the
past
24
hours
after
issuers
submitted
their
amended
spot
ETH
ETF
S-1
registration
statements
with
the
Securities
&
Exchange
Commission
(SEC)
on
Monday.
According
to
Santiment’s
data,
recent discussions
surrounding
ETH
appear
to
be
bullish
despite
wider
bearish
sentiments
across
altcoins.
Many
analysts
expect
the
ETFs
to
begin
trading
within/after
two
weeks.

The
SEC
approved
issuers’
spot
ETH
ETF
19b-4
filings
in
May
but
also
needs
to
greenlight
their
S-1
drafts
before
the
products
can
go
live
on
exchanges.

While
the
current
ETH
price
suggests
that
most
traders
aren’t
overly
bullish
on
the
ETH
ETF
launch,
K33
Research
analysts
suggest
in
a
recent
report
that
the
market
is
underpricing
the
impact
of
these
products.

“We
believe
the
market
underappreciates
the
ETH
ETF
effect
and
forecast
that
US
ETH
ETFs
will
absorb
1%
of
the
circulating
ETH
supply.
We
expect
the
ETH
ETF
effect
to
lead
to
ETH
outperformance
in
H2
2024,”
said
K33
Research
analysts.

Percentage
of
circulating
ETH
supply
held
in
investment
vehicles

Meanwhile,
Grayscale
has
announced
a
“record
date”
of
July
18
for
the
initial
creation
and
distribution
of
shares
of
its
Ethereum
Mini
Trust
to
holders
of
the
Grayscale
Ethereum
Trust
(ETHE)
ahead
of
its
conversion
when
spot
ETH
ETFs
launch.
According
to
the
announcement,
Grayscale
will
contribute
10%
of
ETHE
(about
$500M-$600M)
to
the
Mini
Trust.

Considering
Grayscale’s
Ethereum
Mini
Trust
filings
have
yet
to
be
approved
by
the
SEC,
the
move
could
help
reduce
outflows
for
ETHE
after
its
conversion
to
an
ETF. “It
looks
like
it
effectively
locks
up
10%
of
ETHE
NAV
(net
asset
value)
until
the
Mini-trust
is
approved
for
trading…reducing
potential
for
outflows,”
said
Scott
Johnsson,
general
partner
at
Van
Buren
Capital.

ETH
technical
analysis:
Ethereum
STHs
could
determine
ETH’s
next
move

Ethereum
is
trading
around
$3,050
on
Tuesday,
up
about
2%
on
the
day.
ETH’s
price
sustaining
above
$3,000
has
seen
its
short
liquidations
reach
$18.30
million
and
long
liquidations
at
just
under
$12
million
in
the
past
24
hours,
according
to
Coinglass
data.

The
liquidation
data
aligns
ETH’s
Taker
Buy
Sell
Ratio,
which
measures
the
number
of
buy
orders
versus
sell
orders.
The
ratio
is
at
1.004,
indicating
the
bearish
pressure
has
cooled.

Additionally,
ETH’s
180-day
Market
value
to
realized
value
ratio,
which
measures
the
profitability
of
all
coins
purchased
in
the
last
180
days,
is
hovering
around
-5
%,
meaning
most
short-term
holders
(STHs)
are
at
a
5%
loss.
This
is
its
lowest
level
since
October.
A
further
drop
could
cause
panic
among
most
STHs,
who
may
sell
off
their
tokens
to
cut
losses.

On
the
flip
side,
the
low
MVRV
indicates
a
potential
buying
opportunity
ahead
of
the
launch
of
spot
ETH
ETFs,
which
may
propel
ETH
to
new
highs.
If
the
ETFs
prove
successful,
ETH
faces
resistance
at
$3,547,
while
the
$2,852
level
remains
a
key
support
level
if
bearish
sentiment
persists.

ETH/USDT
4-hour
chart

ETH
could
rise
to
$3,104
in
the
short
term
to
sweep
a
$3.78
million
liquidation
wall.