Despite the buzz surrounding Ark Invest’s recent Ethereum spot exchange-traded fund (ETF) application in the United States, the price of Ethereum remained relatively unaffected. This ETF application, submitted on September 6, was anticipated to stir the market, but the aftermath saw the Ethereum price merely peaking at $1,650 the next day. Interestingly, any minor gains were almost entirely offset in the subsequent period.
Performance of Ethereum Price
Ethereum, the world’s second-largest cryptocurrency, has been experiencing a sluggish market performance. According to CoinGecko data, the Ethereum price was around $1,628, marking a minuscule 0.1% price increase over the past week.
Understanding Spot ETH Exchange-Traded Fund
A spot ETH exchange-traded fund is an investment instrument that mirrors the Ethereum price in the spot market. It facilitates investors to buy and sell the cryptocurrency through a brokerage account. This type of product is expected to fuel interest and investment in Ethereum.
Why Ethereum Price Barely Moved Following Ark’s ETF Application
Despite the promising news, the Ethereum price stayed relatively stagnant over the week. A report by IntoTheBlock, a blockchain analytics firm, shed light on the reasons behind this lack of price movement.
IntoTheBlock attributes the current supply and demand balance as one of the main factors for the Ethereum price’s sideways movement. The data shows that large holdings are closely consolidated around Ethereum’s current price, confining prices within a narrow range. Approximately 5.1 million ETH was bought below the $1,600 mark, providing support, while about 6.5 million ETH was purchased above this level, creating resistance.
In addition, IntoTheBlock suggests that while bullish traders may have responded to the news, “discretionary sellers” quickly took over the narrative. This could be linked to FTX’s impending liquidation of reportedly $3B in crypto holdings. The timing of these liquidations is yet to be announced by FTX, but the recent activity on the exchange’s wallets may have triggered market concerns.
This sentiment is also mirrored in the performance of SOL, which experienced a dip after Visa announced it would use the Solana network for payment settlements. Despite an initial surge of over 5% to trade above $20, the cryptocurrency is now trading below $19.5. Given that Ethereum and Solana tokens form a significant part of FTX’s holdings, it’s plausible that the market performance of these assets is influenced by traders’ caution regarding the upcoming liquidation.
For those interested in tracking these market movements and more, the cryptoview.io application is a reliable tool. It provides real-time data and insights to help you stay updated with the latest cryptocurrency trends.
