(Kitco News) – Bitcoin (BTC) bulls battled to hold support at $67,000 in early trading on Tuesday after the launch of multiple spot Ethereum (ETH) exchange-traded funds (ETFs) failed to spark an influx of new liquidity into the market, suggesting the launches were already priced in.
Data provided by TradingView shows that an attempt to break above resistance at $68,000 late Monday was soundly rejected by bears, who then smashed through support at $67,000, dropping Bitcoin to a low of $65,950 by mid-morning on Tuesday.
BTC/USD Chart by TradingView
At the time of writing, Bitcoin trades at $66,656, a decrease of 0.55% on the 24-hour chart.
“BTC has dipped this morning, primarily due to movements involving Mt. Gox and US Government-held coins,” said analysts at Secure Digital Markets. “The Mt. Gox estate has shifted a substantial $3 billion, with $300 million moved internally and the remainder transferred to external wallets. Currently, Mt. Gox's balance stands at $6 billion, down from $10 billion in June.”
But there are signs that demand from investors remains high, as “U.S. BTC ETFs experienced significant net inflows of $533.6 million on Monday, likely in anticipation of the newly approved ETH ETFs by the SEC, which have begun trading today,” they added.
“The launch of spot ETH ETFs is an exciting development, with hopes high that it will attract a broader investor base for ETH,” the analysts said. “Similar to the spot BTC ETFs that debuted in January, many of these ETFs are waiving fees for up to a year.”
“While BTC is often seen as digital gold, ETH is viewed more as a tech play,” they noted. “Investors are keeping a close eye on Grayscale's $9 billion ETH Trust, amid concerns that Grayscale's potential selling pressure could offset the positive impact of the new inflows, at least initially. The big question now is whether these new ETFs can replicate the success of the BTC ETFs from January.”
Bloomberg senior ETF analyst Eric Balchunas reported that after 90 minutes of trading, the nine Ether ETFs saw a combined volume of $361 million, putting them in the top 1% of all ETFs.
Here's where we at after 90 minutes. $361m total. As a group that number would rank them about 15th overall in ETF volume (about what $TLT and $EEM trade), which is Top 1%. But again compared to a normal ETF launch, which rarely see more than $1m on Day One, all of them have… pic.twitter.com/R5UgQFR1L6
— Eric Balchunas (@EricBalchunas) July 23, 2024
Market analyst Kaleo provided insight into Ethereum’s price action before the ETFs began trading, saying that he still saw “a high likelihood we see some type of pullback after the spot ETF launches.”
“We're still early enough into this bull market that shorting is a greedy play if you're giga-bullish on a higher time frame (ETH hasn't even touched a new ATH yet). Price discovery is inevitable,” he said. “Imo spot w/ some fiat to buy any potential dip is the best position to be in entering [Tuesday].”
Kaleo’s analysis proved prescient as Ether struggled to gain momentum in early price action on Tuesday, trading at $3,461 at the time of writing, an increase of 0.15% on the 24-hour chart.
ETH/USD Chart by TradingView
In the stock market, Secure Digital Markets noted that “Earnings season is underway, with Tesla and Alphabet set to report after the market closes on Tuesday. These reports will provide the first glimpse into the performance of major tech-related companies in the second quarter, and could have significant market implications.”
