Welcome to Extreme Investor Network, where we provide unique insights and analysis on the stock market, trading strategies, and all things Wall Street. Today, we’re taking a closer look at the current situation in the Ethereum market and how traders are positioning themselves ahead of the ETH spot ETF launch on July 23.
Over the weekend, there has been a notable increase in traders shorting Ethereum in anticipation of a potential “sell-the-news” event. This phenomenon occurs when traders sell an asset following a positive event, in hopes of profiting from a market downturn after the initial excitement.
According to the Ethereum Liquidation Map, bears have amassed $704 million in leverage short contracts against ETH, surpassing the $394 million worth of active ETH long futures contracts. This imbalance of short positions exceeding long positions has put downward pressure on the price of Ethereum, preventing it from breaking above the $3,600 mark.
However, there may be a potential catalyst for a shift in market sentiment as news of Joe Biden bowing out of the 2024 Presidential Campaigns race could impact spot market demand when US markets open on Monday, July 22.
Looking at the Ethereum price forecast, we see that ETH is currently hovering around the $3,450 mark. Technical indicators suggest a cautious outlook for the week ahead, with the Bollinger Bands on the daily chart indicating lower volatility and a potential consolidation phase. Critical resistance and support levels are defined by the upper band at $3,631.12 and the lower band at $2,852.28, respectively.
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