Trading Ethereum: expectations are growing for the spot ETF on ETH and the crypto aims for $3,000 in the short term

Investors’ trading expectations on the potential approval of the spot Ethereum ETF are pushing the price of ETH to new yearly highs.

According to experts, the second cryptocurrency in the world is aiming for $3,000 as the next target.

The 14-week RSI indicator suggests an imminent further rally for Ethereum, which could outperform the top cryptocurrency by market capitalization and become the most watched currency in the coming months.

All the details below.

Everyone excited about the approval of the spot ETH ETF in the United States

After the approval of Bitcoin spot ETFs in the United States that led to the latest BTC price rally, now investors are betting on the arrival of ETFs for Ethereum, with ETH potentially replicating the trading performance of the market’s first cryptocurrency.

To fuel the hopes of industry insiders, recent deposits have been presented by well-known Fund Managers such as Franklin Templeton, BlackRock, Fidelity, Ark and 21Shares, Grayscale, VanEck, Invesco and Galaxy, and Hashdex, who on Thursday contacted the Securities and Exchange Commission to request a new regulated product in the crypto sector.

The “exchange-traded products” are Bitcoin that have already paid off, leading to a reduction in selling pressure on cryptocurrency exchanges: since January 11th, these funds have accumulated a total of 11 billion dollars in BTC, supporting the bullish push above the $50,000 mark for the crypto asset.

BlackRock alone has purchased over 100,000 BTC while Grayscale, after the initial large outflow (expected given the high trust fees), has started to ease the outflows

It is clear that a similar scenario in which Ethereum is included as an investment asset in a product regulated by the SEC would lead to an increase in trading transactions worldwide, with a strong stimulus from the demand institutional.

In all of this, another bullish factor is that regulated Ether products could also offer annual rewards of up to 5% based on token staking. The offering of such products is already planned in some parts of Europe.

If the spot ETF for ETH were to be approved in the coming months, we could expect a quick return to the 2022 highs, in a trading range between 3,000 and 3,500 USD, with potential bullish continuations on the horizon.

ETH has already benefited from the bullish conditions of its cousin BTC, reaching new annual highs yesterday in the $2,800 area with a growth of over 20% in the last two weeks. 

This means that several traders are already positioned on the crypto with a bullish sentiment.

As stated by Alex Kuptsikevich, senior market analyst at FxPro, in an email to CoinDesk:

“The 15% increase in less than nine days suggests a significant buying interest after the bulls reloaded their positions in January”

Trading on the price of Ethereum (ETH): next target 3,000 USD

Technical analysis of Ethereum trading shows a highly strong asset, which in the last week has executed a textbook breakout of local highs, bringing ETH close to $2,800.

Bulls push for another rally before the weekend with all indicators signaling a clearly bullish momentum for the cryptocurrency.

In particular the RSI, which measures the speed and change of price movements over a certain period, indicates a current value of 70 in the last 14 weeks, which could open the doors to a bullish explosion of ETH.

Despite the overbought level of 70 normally suggesting a correction is coming, in this case it could prove to be a great buying opportunity since in the past reaching this zone has led the price of the crypto to follow parabolic trends.

In fact, if we look at the past history, we realize that in January 2016, February 2017, December 2017, July and November 2020, and March 2021, when the RSI recorded a value equal to or greater than 70, trading on ether went through crazy bullish runs.

Obviously, the future scenario of Ethereum is subject to global macroeconomic dynamics and US regulatory issues related to the alleged upcoming spot ETFs, as well as the price action of Bitcoin that still leads the crypto market with its performance.

On the Bitcoin front, it is worth noting that ETH has long been at a disadvantage in terms of prices compared to the market leader, which has been showing better performance since September 2022.

The latest technical innovations on the Ethereum blockchain front could provide the necessary push to gain more visibility for the asset, with a possible boost in trading activities among institutional investors.

In detail, the debut of the ERC-404 standard that introduces for the first time the concept of “fractional NFTs” and with the Dencun update scheduled for March that significantly reduces transaction and storage costs on layer-2 could be the necessary catalysts to bring ETH above $3,000, and then subsequently to $3,500 and beyond.

Unless the overall outlook of risk-on markets changes significantly in the coming weeks, Ethereum is set to carve out a leading role in the coming months.

Daily chart of Ethereum price (ETH/USD)