Ethereum (COIN: $ETH) Dips Below $3K Support As Short-Term Fear Rises Amid New JP Morgan Forecast on ETH ETF Approval

Ethereum (COIN: $ETH)

Ethereum (COIN: $ETH) is the second-largest cryptocurrency after Bitcoin by market cap. It is an open-source, decentralized blockchain ecosystem that supports various use cases, including the launch of various tokens. Additionally, it supports smart contracts, which led to the creation of the DeFi industry. 

Ethereum has plummeted 6.21% over the past week, weighed down by Bitcoin’s bearish momentum in the past few weeks. The recent Bitcoin halving event in April did not deliver the anticipated price pump, and most coins have been in a general decline since the event. 

JP Morgan Forecast ETH ETF Approval 

Ethereum has witnessed a surprise downtrend in recent weeks. According to a recent report, JP Morgan analysts forecast the approval of spot Ethereum ETFs despite the recent Wells notices to major crypto companies such as Uniswap, Robinhood Crypto, and Consensys.  

The report notes that the Wells notices do not touch on ETH ETF. However, the bank believes that if an Ethereum ETF is approved, it will not significantly impact the crypto market. 

It stated, “Markets do not expect an approval by this month as implied by the significant discount to NAV by the Grayscale Ethereum Trust ETHE.”

JP Morgan analyst also anticipates if the SEC does not approve the product, they may “face a legal challenge and eventually lose.”  

Ethereum Inflows Rise To $30 Million

According to a May 7, 2024, Coinshare report, the week witnessed the first instance of significant outflows from the recently launched US Bitcoin ETFs, with $156 million in total outflows recorded the previous week. 

Outflows from digital assets totalled $251 million in the first week of May, marking the fourth consecutive week of outflows. Bitcoin led the pack with $384 million in outflows. In contrast, Ethereum saw $30 million in inflows, breaking a 7-week spell of outflows. 

The launch of BTC and Ethereum ETFs in Hong Kong in late April 2024 may have provided a boost for ETH inflows. In total, the Hong Kong ETFs saw inflows of $307 million in their first week of trading. 

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ARK Invest, 21Shares Excludes ETH Staking From Latest ETF Filing

Ark Invest, 21Shares had included staking for Ethereum ETF in an earlier filing. However, they removed it from their latest applications filed on Friday last week. This has created doubts among investors and raised questions about it.

In an earlier submission, ARK, 21Shares mentioned staking, suggesting the possibility of staking a portion of the Trust’s assets through trusted Staking Providers. However, this particular mention was omitted in the revised filing released on Friday.

However, Bloomberg ETF analyst Eric Balchunas believes it could be a strategic move or an attempt to highlight the possible concerns raised by the SEC.

Ethereum Performance

Ethereum ($ETH) is currently trading at $2,922.30, down by 6.63% over the past week. At the time of writing, the market cap is $350.22 billion, with a 24-trading volume of $6.1 billion, down by 46.93%.

Ethereum is trading with a weak Relative Strength Index (RSI) of 38.41, which is slightly oversold. The asset’s daily price chart shows that Ethereum is in a “Falling Wedge” pattern, but a trend reversal is looming soon as the ETH-spot listing is on the way.

Ethereum USD (ETH-USD)

Should You Add ETH to Your Portfolio?

Ethereum is one of the biggest decentralized platforms for smart contracts. The price has tumbled due to Bitcoin’s bearish movements. However, it has seen an uptick in inflows, and JP Morgan expects the approval of spot ETH ETF in May, which could help the price trend upwards. Despite the current downturn, its long-term price trend is promising.   

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