After Ethereum is approved for spot ETF, if the closing price exceeds this level, it is expected to reach $5,000

Market veteran Ali Martinez analyzed Ethereum market dynamics following the spot ETF approval and predicted a price increase to $5,000 if key levels hold.

Recently, the U.S. Securities and Exchange Commission (SEC) approved multiple Ethereum spot exchange-traded funds (ETFs), causing significant fluctuations in the price of Ethereum.

This milestone has sparked renewed attention and discussion among traders and analysts. Market veteran Ali Martinez on X provides an in-depth analysis of the potential impact of recent developments on Ethereum market dynamics, and looks at shifting market trends.

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Increase in ETH deposited in exchanges

Martinez highlighted the increase in Ethereum transfers to cryptocurrency exchanges, noting that such movements typically mean increased trading activity. Over 242,000 ETH has been transferred to exchange wallets in the past two weeks.

As a result of this massive influx of tokens, exchanges now hold a balance of 13.69 million ETH, representing 11% of Ethereum’s circulating supply. This increased influx could mean that whales are looking to rebalance their portfolios, take profits, or engage in speculative trading.

Ethereum Exchange Reserves | CryptoQuant

Jeffrey Wilke, one of the co-founders of Ethereum, was one of the whales involved in these transfers. Martinez discovered that he transferred 10,000 ETH ($37.38 million) to the Kraken exchange. The move deepened speculation that major shareholders may be preparing to take profits or adjust their holdings in response to ETF approval.

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Martinez also looked at sentiment among industry experts regarding the Ethereum market. For example, well-known industry figure Anthony Pompliano believes that the approval of an Ethereum ETF is a major milestone that could signal wider acceptance of the cryptocurrency industry.

However, Martinez urged caution, suggesting that an increase in deposits to exchange wallets could mean an impending sell-off or increased profit-taking activity. Despite the uncertainty, a report from CryptoQuant confirmed today that long-term holders recently purchased over 100,000 ETH.

Ethereum Support and Resistance Levels

Furthermore, support and resistance levels play a key role in determining Ethereum price action. According to the In/Out of the Money Around Price (IOMAP) indicator, there is an important demand area between $3820 and $3700.

Within this range, over 1.81 million addresses hold 1.66 million ETH. This area may act as a strong support level that may prevent the price from falling sharply due to selling pressure. However, if ETH fails to hold this level, the next support area lies between $3580 and $3462, where 3.13 million addresses bought 1.5 million ETH.

Ethereum has the potential to rise to $5,000

On the upside, Ethereum faces a critical resistance barrier located between $3940 and $4054, where approximately 1.16 million addresses previously purchased 574,660 ETH. Overcoming this resistance may prove challenging, but if Ethereum can record a daily close above $4170, it could invalidate the negative trend.

According to Ali Martinez, such a move could trigger a new upward phase that could push Ethereum’s price towards $5,000. Ethereum is currently trading at $3,720, down 1.56% today, but maintaining a 20% gain over the past week. Despite the recent rise, its daily RSI remains below 70 and currently stands at 67.

Disclaimer: This content is for informational purposes only and does not constitute financial advice. The opinions expressed in this article may contain the personal opinions of the author and do not necessarily reflect the views of The Crypto Basic. Readers are encouraged to perform thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.