Despite Ethereum facing significant selling pressure and a 15% drop from March 2024, on-chain data indicates a positive outlook for the cryptocurrency. Analyzing the recent activity on the X platform, it is shown that there has been a noticeable surge in demand for ETH, particularly from long-term institutional holders. These permanent holders, who are typically institutions with significant financial resources, have been accumulating ETH at a rapid pace. Unlike retail investors, they are less likely to be swayed by short-term market fluctuations and are more inclined to hold onto their assets for an extended period.
According to data from CryptoQuant, these permanent holders were responsible for the second-highest daily ETH purchases on June 12, acquiring a substantial amount of 298,000 ETH. This significant buy-in indicates a strong bullish sentiment among institutional investors towards Ethereum. Even though Ethereum has been experiencing a series of lower lows in its daily chart, the increased demand from these holders suggests confidence in the long-term potential of the asset.
Despite the recent bounce in prices on June 12, Ethereum has struggled to fully recover from the losses incurred on June 11. The emergence of $3,700 as a resistance level in the daily chart indicates the presence of selling pressure in the market. Following a breakout on June 7, Ethereum has been on a downward trajectory, with prices plummeting to fill the gap from May 20. If this trend continues, it is likely that Ethereum may re-test the $3,300 level.
On a regulatory front, there is optimism surrounding the approval of a spot Ethereum exchange-traded fund (ETF) in the United States. Comments from Gary Gensler, the chair of the Securities and Exchange Commission (SEC), suggest that the ETF may start trading as early as the summer. With Blackrock having resubmitted its S-1 filing, awaiting approval for the ETF, it could potentially bring a significant liquidity boost to Ethereum. Similar to spot Bitcoin ETFs, the approval of an ETH ETF could attract billions from institutional investors looking to gain exposure to the cryptocurrency.
Despite the recent price pressure and market weakness, the bullish case for Ethereum remains intact. The increased demand from institutional holders, coupled with the potential approval of an ETH ETF, indicates positive sentiment towards the cryptocurrency. While short-term price fluctuations may continue, the long-term outlook for Ethereum appears to be promising as institutional investors continue to show confidence in the asset’s potential.
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