• Ethereum has struggled to break $4K despite ETF approvals and faces a midterm bearish outlook, with Bitcoin also dipping below $70K.
  • Increased whale accumulation and upcoming economic data from the US Federal Reserve and Bureau of Labor Statistics are contributing to market volatility and pressure on ETH.

Despite the recent approval of spot Ether ETFs in the United States and Hong Kong, Ethereum (ETH) has struggled to rally beyond $4K. Ethereum price has closed the past two weeks on a bearish note, a trend that seems likely to continue this week. Additionally, Bitcoin (BTC) slipped below $70K on Monday after facing major resistance around $72K.

The broader altcoin market also opened this week with a bearish outlook, influenced by high-impact news from the United States. This Wednesday, the United States Federal Reserve is set to release its highly anticipated funds rate. While market economists expect a hold on Federal Reserve rates, the European Central Bank (ECB) has already cut its rate from 4 percent to 3.75 percent, and the Bank of Canada has also initiated interest rate cuts. This has increased pressure on the Federal Reserve to follow suit.

Market Volatility and Economic Indicators

In addition to the Federal Reserve’s announcement, the United States Bureau of Labor Statistics will release crucial Consumer Price Index (CPI) data on Wednesday. This cumulative high-impact news is expected to significantly impact the crypto market, leading to increased volatility.

On-chain data analysis from Glassnode reveals that Ethereum addresses holding at least 10,000 Ether units have increased by about 3 percent in the last three weeks. Notably, Ethereum’s supply on centralized exchanges is at an eight-year low, indicating that long-term buyers are relentlessly accumulating the altcoin. This supply-demand shock is expected to tighten further with the listing of the approved spot Ether ETFs in the United States. BlackRock, for instance, has announced a $10 million seed for its spot Ether ETF, which is significantly higher than its seed for the spot BTC ETF.

Ethereum buyers are betting on an inevitable rally in the coming months, particularly based on the four-year crypto bull cycle recently marked by the Bitcoin halving. The Ethereum network has also been preparing for mass Web3 adoption through several updates aimed at reducing network fees and increasing throughput.

Price Predictions and Network Adoption

Ethereum’s price has closely mirrored that of Bitcoin in the past, with a few exceptions. According to popular crypto analyst Crypto Patel, Ethereum must defend the support level around $3,650 to avoid further correction towards $3,152. If Ethereum’s price fails to hold this support level and drops to $3,150, Patel suggests that the altcoin could surge beyond $4K, reaching midterm targets between $6K and $7K.

In the long term, Ethereum’s price is expected to go parabolic in the coming quarters, fueled by heightened network adoption. As of this report, the Ethereum network boasts a total value locked of over $64 billion and a stablecoins market cap of about $80 billion. This growing adoption and the strategic accumulation by whales suggest a positive outlook for Ethereum in the mid to long term, despite the current bearish trend.