- Analysts warn that ETH could fall to $2.4K after the ETF’s launch
- Another market observer blamed macro conditions, BTC and SOL, for ETH’s negative sentiment.
Expectations of the Ethereum [ETH] ETFs have been down and analysts have had mixed views on the topic.
At the time of writing, ETH retreated to a low of $3.2K, down 18% from its recent high of $3.9K following the partial approval of ETFs in late May.
With just days until the potential launch of an ETF, Andrew Kang, founder of crypto fund Mechanism Capital, expected ETH to fall further to $2.4K. Part of his recent analysis read,
“For the launch of the ETF, I expect ETH to trade between $3,000 and $3,800. After the launch of the ETF, my expectation is $2,400 to $3,000.”
Kang suggested that ETH ETF flows could be dismal in the first few weeks for two reasons.
First, the SEC’s 180 degree pivot and approval in late May was a surprise move that limited time to convince major ETH holders to move to ETF.
Secondly, Kang pointed out that the switch to ETF does not bring any advantages. As a result, he estimated that ETH ETF could only attract 30% of BTC ETF flows in the first six months, approximately $1.5 – $4.5 billion.
Other reasons for Ethereum’s negative sentiment
For his part, Quinn Thompson, founder of crypto hedge fund Lekker Capital, said: suggested that the negative ETH sentiment stemmed from the fact that it was overshadowed by BTC and Solana [SOL].
Thompson added that the repricing of SOL against ETH reinforced the “ETH killer” narrative.
‘SOL is priced 6x higher versus ETH, so this isn’t as easy as it was’
Thompson also noted that the BTC ETFs and the massive interest in underpriced SOL further isolated ETH into the “middle-child syndrome.” Moreover, the liquidity crisis made the situation even worse.
“Additionally, overall prices have been stagnant or declining for three months and market sentiment is in the gutter due to a macro-liquidity crisis.”
Despite the negative sentiment, other analysts such as QCP Capital maintained a bullish outlook ahead of the ETF launch in early July. noted,
“ETH’s bullishness continues, with ETH volumes trading at an 18% premium to BTC ahead of an upcoming ETH spot ETF launch.”
QCP analysts had done that before projected a retest of $4K was possible after the launch of the ETF. At the time of writing, ETH was trading at $3.2K, and it remains to be seen how ETF will determine volatility and price direction.