Can ETH price crack $3.5K? Ethereum ETF debut will precede new highs, analysts say

Ether price could be on track to reach a new all-time high as the industry is about to witness the launch of the first spot Ether exchange-traded funds (ETFs), which could occur as soon as next week.

Ether could hit a new all-time high after next week’s ETH ETF launch

Ether ( ETH ) price could be on track to a new all-time high after the launch of the first US spot Ether ETFs , according to Matt Hougan, the CIO of Bitwise.

Hougan cited three main reasons for Ether reaching a new all-time high, including ETH’s Inflation Rate, the fact that Ether stakers aren’t selling like Bitcoin (BTC) miners, and that 28% of Ether supply is already out of the market.

In a July 16 blog post, Hougan wrote :

“ Ethereum’s inflation rate over the past year is exactly 0%... Significant new demand meets 0% new supply? I like that math. And if activity on Ethereum ticks up, so does the amount of ETH being consumed. That's another lever of organic demand working in investors' favor.”

Other factors also point to an incoming rally, including the number of Ether withdrawals from centralized exchanges, according to crypto analyst Leon Waidmann.

The analyst wrote in a July 19 X post:

“$126M worth of #ETH was withdrawn from exchanges this week, signaling massive accumulation ahead of the ETF launch. Next big $ETH rally incoming.”

ETH: Balance on exchanges (total). Source: Leon Waidmann

$3,500 remains formidable resistance

However, Ether futures suggest little confidence in the chance of Ether breaking above the $4,000 mark in the short term, as the $3,500 mark remains a significant resistance zone.

Ether’s relative strength index (RSI) also suggests that Ether's price needs to cool down before rallying to a new all-time high. On the daily chart, Ether’s RSI rose to 58, which suggests that the asset is not yet overbought, but is trading above its fair value, according to TradingView data .

ETH/USD, RSI, 1-day chart. Source: TradingView

The RSI is a popular momentum indicator used to measure whether an asset is oversold or overbought based on the magnitude of recent price changes.

Related: Bitcoin analysts say 74K is the next stop for BTC price

Ethereum shakeout could happen first

Ether price could first see a sell-the-news event after the initial ETF launch before starting its sustained rally toward new all-time highs.

Hence, the real opportunity to invest in Ether long term could come after the first few weeks of the ETF debut, according to Alvin Kan, COO, Bitget Wallet.

Kan told Cointelegraph:

“Similar to how the market reacted when BTC spot ETF got approved, we expect ETH to jump in price for a short time after its own ETF gets the green light. However, there might be followed by some selling pressure for a week or two afterward, as a result of outflows from instruments like Grayscale's ETF.”

Eth price will be able to climb in a more sustained manner after the initial shakeout, added Kan:

“Once this initial shakeout is over, the price of ETH could start to climb steadily each month, depending on the daily inflows into the new ETH spot ETF.”

Other analysts expect the Ether ETF to have wider ramifications on the altcoin market. For instance, popular crypto trader Mikybull expects the ETFs to catalyze the next altcoin bull market cycle.

The trader wrote in a July 19 X post:

“ETH ETFs will be the major catalyst for a massive rally sparking a huge Alts season in this cycle.”

ETH/USD, 2-month chart. Source: Mikybull

Ether price rallied over 11% during the past week, but ETH is still trading 29% below its old all-time high of $4,890 reached in November 2021.

Related: Bitcoin bears trapped, but can BTC price surpass $70K by August?

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.