Key Points
- Ethereum (ETH) could potentially rally by 90% to $6.5k, following a similar trend to Bitcoin post-ETF.
- However, current demand from U.S. investors is low, which could affect market sentiment.
Ethereum (ETH) experienced a decrease from $3.5k to $3k two days after the U.S. spot ETH ETF launched, marking an 8% decline. The price was slightly above $3.2k at the time of writing.
Analyst Croissant noted that ETH’s price movement following the ETF launch resembled Bitcoin’s (BTC) pattern after U.S. spot BTC ETFs were introduced in January. If this correlation continues, ETH could drop to $2.7k in two weeks before rallying 90%, based on the analyst’s prediction.
ETH’s Potential Rally
This implies that ETH could reach $6.5k by September, marking a substantial 90% rally in two months. For comparison, BTC fell from $48k to $40k after the BTC ETF was launched, before surging to $73K in March.
However, it’s important to remember that correlation does not always imply causation. Therefore, ETH following BTC’s post-ETF pattern does not guarantee a similar outcome.
Analysts suggest that ETH could benefit from anticipated Fed rate cuts in September, which could boost all risk assets, including crypto. However, ETH has been underperforming BTC in its spot ETF debut week, as evidenced by the declining ETHBTC ratio.
ETH’s Performance and Future Projections
If the ratio drops below the mid-range level, near 0.045, ETH could weaken further relative to BTC. Andrew Kang of Mechanism Capital warns of a high risk of the ETHBTC dropping to 0.04 or below, making it less attractive as a hedge.
This risk is linked to the net outflows from U.S. spot ETH ETFs over the past two days, driven primarily by Grayscale’s ETHE bleedout. Despite this, Daniel Yan of Kryptanium Capital remains hopeful that the 0.045 level could slow the ETHBTC decline.
According to JA Maartunn, head of research at CryptoQuant, a bullish reversal for ETH could occur if strong demand emerges from U.S. investors. However, at the time of writing, U.S. demand remains low, as indicated by the low Coinbase Premium Gap.
