Ethereum (ETH), the second largest cryptocurrency by market capitalization, continues to be in a mixed bag as a variety of factors influence its price and adoption. Recent developments in ETFs, network upgrades, and market trends paint a complex picture for major smart contract platforms.
Ethereum ETF’s woes revealed: Overwhelming performance in the US market
The launch of the Spot Ethereum ETF in the US, once heralded as a major milestone, fell short of expectations. Since their approval in July, the nine Ethereum ETFs have seen declining flows and lackluster performance. “I've been wrong so far. I've been too bullish,” Bloomberg Intelligence analyst James Seifert admitted during a panel discussion at the Permissionless Crypto Conference.
According to data from Glassnode, the Ethereum ETF has experienced negative daily flows of 61% since its inception. According to Pharcyde Investors, the total amount leaked was a whopping $546 million. This disappointing performance is in stark contrast to Bitcoin ETFs, which attracted $12 billion in inflows in the first quarter alone.
The lack of response has led to speculation that the SEC may have prematurely approved the Ethereum ETF. The regulator also extended its review of Cboe's proposal to list options for an Ethereum ETF, moving the decision deadline from October 19 to December 3.
A glimmer of hope for the Australian market
As US-based Ethereum ETFs struggle, Australia has launched its first ETF that directly holds Ether. The Monochrome Ethereum ETF (IETH) launched on Cboe Australia on October 15th with $176,600 in assets under management. This follows the successful launch of a black-and-white Bitcoin ETF in June, which raised approximately $10.7 million.
Monochrome Asset Management CEO Jeff Yu expressed confidence in the potential of spot crypto ETFs in the Australian market, citing a “different trajectory” compared to other markets.
ETH/USD technical analysis: price spike and upside potential
Despite the challenges for ETFs, Ethereum price has shown resilience. ETH recently surged above the $2,500 resistance level, gaining more than 5% with fresh gains. The price is currently trading above $2,550 and the 100-hour simple moving average.
A major bullish trend line is forming at the support near $2,520 on the hourly chart. If Ethereum can clear the $2,620 and $2,650 resistance levels, the upward momentum could continue. The next major resistance level is at $2,720, with potential targets at $2,800 and $2,880 if the rally continues.
However, failure to break above $2,650 could lead to a downside, with support levels at $2,600 and $2,520. Below these levels, the price could head towards $2,450 or even $2,400 in the short term.
Proposed network upgrade: Lower validator thresholds
In an important development, Ethereum co-founder Vitalik Buterin proposed lowering the validator threshold from 32 ETH to 1 ETH. This change aims to democratize staking and strengthen Ethereum's decentralization by allowing more individuals to participate in network validation.
The proposal also includes a “single-slot finality” feature that speeds up block confirmation, potentially reducing finalization time from 15 minutes to about 12 seconds. If implemented, these upgrades could usher in a new era of accessibility and efficiency for Ethereum.
