Ethereum futures markets suggest rally to $3.7K is highly unlikely

 

Ether (ETH) price might be on the brink of its most significant event in terms of a spot ETH ETF integrating the altcoin with traditional financial markets, yet its price is not responding as expected. In fact, on June 24, Ether reached its lowest level in over a month, falling to the $3,250 level. Although ETH eventually reclaimed the $3,400 support on June 25, both onchain and derivatives metrics suggest limited upside potential.

Analysts say the spot ETH ETF launch could disappoint

Some analysts believe that the timing of the Ethereum spot exchange-traded fund (ETF) launch is unlikely to result in substantial net inflows under the current market conditions. Even though the regulator dropped its investigations into Consensys, a prominent Ethereum ecosystem company, and shelved the potential classification of Ethereum staking as a security, the broader economic environment remains challenging.

Bloomberg ETF analysts Eric Balchunas and James Seyffart project that Ethereum ETFs could attract between $1 billion and $2 billion in the initial weeks. Likewise, Stephen Richardson, managing director of financial markets at Fireblocks, told Cointelegraph that he expects significantly lower inflows at the Ethereum ETF launch.

Markus Thielen, head of research at 10x Research, noted that the revenue Ethereum generates is “minuscule” compared to its market capitalization, indicating that the asset does not currently represent a “viable, sufficiently cash-flow-producing investment.” Thielen also pointed out that the yields from Ether staking remain lower than those from United States Treasury bonds.

Despite a more favorable cryptocurrency regulatory environment in the U.S., it is crucial not to overlook macroeconomic trends. The U.S. Conference Board reported on June 25 that its consumer confidence index fell to 100.4 from 101.3 in May, suggesting that households are concerned about inflation, according to Yahoo Finance.

Also on June 25, U.S. Federal Reserve Governor Michelle Bowman reiterated that interest rates would stay higher “for some time,” as reported by Yahoo Finance. Bowman highlighted that inflation is still…

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