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Technical chart analyst Ali Martinez examined whether the Ethereum (CRYPTO: ETH) ETF approval was a "sell the news" event and explores potential price paths based on recent market activities and technical indicators.
What Happened: Martinez notes significant transfers of ETH to cryptocurrency exchanges after the Ethereum ETF approval by the Securities and Exchange Commission. However, he raises concerns about possible profit-taking, portfolio rebalancing or market speculation. Notably, Ethereum co-founder Jeffrey Wilke transferred 10,000 ETH (worth $37.38 million) to cryptocurrency exchange Kraken.
Supporting this observation, Martinez points out that over the past two weeks, more than 242,000 ETH has been moved to exchange wallets, indicating a potential for increased trading activity and price volatility.
This coincides with high expectations within the industry following the ETF approval. "Although industry leaders see the Ethereum ETF approval as an approval of the entire industry… traders must be cautious," he advises, quoting industry leaders such as Anthony Pompliano.
Also Read: Spot Ethereum ETF Makes BlackRock ‘Very Eager To Push’ This Trending Coin’s Narrative, Trader Claims
Why It Matters: The influx of Ethereum to exchanges suggests a heightened likelihood of a sell-off or increased profit-taking activity. Martinez employs the TD Sequential indicator, which reveals a sell signal on Ethereum's daily chart.
"The current green nine candlestick on the daily chart suggests that a spike in selling pressure could see ETH retrace," he points out, implying potential short-term downside risk.
In his tweet thread, he also highlights the key area of support.
He adds that Ethereum’s most important resistance barrier is between $3,940 and $4,054 where more than 1.16 million addresses had previously purchased around 574,660 ETH. He suggests, "If ETH overcomes this hurdle and prints a daily candlestick close above $4,170, the bearish outlook will be invalidated. This could result in a new upward countdown phase toward $5,000."
What’s Next: The influence of Ethereum as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
Image: Shutterstock
Posted In: $ETH
