Ether Bulls show exhaustion despite SEC’s approval

Ethereum surged by double digits in the past week, but the bullish momentum was stopped by solid resistance near $3,500. On July 18, there was a following decline to $3,400 even though the SEC approved two more Ethereum exchange-traded funds (ETFs). Ether’s futures market hasn’t seen much activity despite this encouraging trend.

At least three issuers were reportedly granted provisional approval by the SEC on July 23 to start trading spot Ether ETFs. Following revisions to the funds’ S-1 registrations, eight spot Ether ETFs are pending final regulatory clearance.

Ethereum’s daily chart shows that the cryptocurrency started a bullish climb, breaking above the 100-day ($3.3K) and 200-day ($3.1K) moving averages, following a noticeable increase in purchasing pressure close to the significant $3K support region.

In addition, ETH has recovered the $3.5K resistance zone, a major challenge for buyers in recent months. This price movement suggests buyers actively participate in the market and try to set a new yearly high.

However, Ethereum has developed a sideways wedge pattern. After a brief period of market consolidation, it is anticipated to resume its upward trend to surpass the wedge’s upper boundary at $3.7K. A new annual high above $4K might result if this barrier is successfully overcome.

The annualized premium, or basis rate, for Ether fixed-month contracts, is currently 11%, which suggests a reasonable level of optimism. Nevertheless, considering the prospective inflows from the impending spot ETF launch in the US, it is rather alarming that this indicator has not maintained levels above 12% for the last month. In contrast, the base rate for Bitcoin is likewise 11%, suggesting that Ethereum investors are not overly optimistic.
Ether Bulls’ gas would be elevated if the anticipation of robust spot ETF net inflows is validated, the present lack of confidence allows space for a surprise.  Ether’s rally hasn’t been impressive despite a favorable scenario for risk-on assets suggests that investors are not as enthusiastic, which lessens the likelihood of a bull run above $4,000.

The market is showing strength as the current consolidation phase validates the recent breakout above the trendline and completes a pullback to it. The price will soon resume its positive trend if it closes above its last central pivot of $3524.