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- SEC postpone decision on BlackRock’s application for options trading on its Ethereum Trust.
- Ethereum exchanges added over 100K ETH to their balance in the past 24 hours.
- Ethereum could sustain bullish momentum if it breaks above the $2,707 key resistance.
Ethereum (ETH) is down 0.5% on Tuesday following the Securities and Exchange Commission (SEC) delaying its decision on BlackRock’s application to list and trade options contracts on the iShares Ethereum Trust (ETHA).
Ethereum ETF options not coming to the market soon
The SEC postponed its decision on BlackRock’s application to list and trade options on the iShares Ethereum ETF (ETHA). Many had anticipated a greenlight after the regulator approved their spot Bitcoin counterparts last week. However, the SEC disappointed investors following the move to delay its decision.
Following this decision, Ethereum ETFs noted a net outflow of $79.3 million on Monday—its highest since late July—after Grayscale’s ETHE witnessed an $80.6 million exodus. The net outflows indicate that ETH has yet to sustain a high institutional appeal from traditional investors in the US.
Meanwhile, ETH could witness a brief selling pressure as its exchange reserve has begun rising. The reserve added over 100K ETH within the past 24 hours, indicating a potential upcoming selling pressure, per CryptoQuants data.
A rising exchange reserve signals high selling potential and vice versa for a low reserve.
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ETH Exchange Reserve
Ethereum needs to overcome $2,707 to sustain bullish view
Ethereum is trading around $2,660 on Tuesday, down 0.5% on the day. In the past 24 hours, ETH sustained over $19.67 million in liquidations, with long and short liquidations accounting for $13.88 million and $5.79 million, respectively.
On the 4-hour chart, ETH is trading within key rectangle boundaries after bouncing off the $2,595 support level. If this support holds, ETH could rally again to reclaim the $2,817 level, which was a major support level for over four months. But it has to overcome a key resistance around $2,707 — where it saw a rejection on Monday — to confirm the bullish move.
ETH/USDT 4-hour chart
QCP Capital analysts also noted that the options data indicates a potential bullish move amid increasing market volatility. “Front end skew for ETH has shifted from puts to calls, while ETH implied vol is trading 9% higher than BTC, suggesting both upside sentiment and higher expected volatility,” the analysts noted.
The Relative Strength Index (RSI) and Stochastic Oscillator momentum indicators are above their neutral levels on the 4-hour chart, signaling prevailing bullish pressure.
A daily candlestick close below $2,595 could trigger a bearish view or lead to sustained consolidation.
In the short term, ETH could rise to $2,671 to liquidate positions worth $51.73 million.
Ethereum development FAQs
After the Merge, the Ethereum community is looking at the Sharding upgrade next, which has been slated for sometime later in the year. The development can be summarized in four words, “scalability through more efficient data storage.” The software update will increase the capacity of the blockchain, widening the amount of data that can be stored or accessed. At the same time, all services running atop the Ethereum blockchain will enjoy significantly reduced transaction fees.
A fork is the splitting of a blockchain after developers agree and proceed to implement upgrades. The decision comes after these developers reach a consensus for a software upgrade. The ensuing part will see one part continue with the status as is, while the other one will proceed with new features combined with the former ones. A hard fork basically entails permanent divergence of a new side chain from the original one, while a soft fork is doing the same, only difference being that it is temporary.
EIP-4844 is an improvement proposal for the Ethereum network. The upgrade promises reduced gas fees, which is a valuable offering considering the high transaction cost that continues to daunt crypto players. It has been a long-standing concern for the Ethereum network. The proposal is also referred to as “proto-Danksharding,” with an unmatched ability to increase the speed of transactions on the Ethereum blockchain. At the same time, it helps to reduce the transaction cost as everything becomes decentralized.
Gas token is a new, innovative Ethereum contract where users can tokenize gas on the Ethereum network. This means they can store gas when it is cheap and start to deploy the gas once the market has shifted to the north. The use of Gas token helps to subsidize high gas prices on transactions, meaning investors can do everything from arbitraging decentralized exchanges to buying into initial coin offerings (ICOs) early.