10x Research pointed the way again: this time, first look at 60,000, then look at 50,000

Original: 10x Research

Compiled by Odaily Planet Daily (@OdailyChina)

Translator: Azuma（@azuma.eth）

The issuer of the six ETH Ethereum Spot ETFs has submitted an updated S-1 form, which means that the Securities and Exchange Commission (SEC) in the United States could approve the issuance of the ETH Ethereum Spot ETF at any time. Meanwhile, Cryptocurrency seems to be in a Rebound state this week, as we predicted in our report last weekend, the reason for this Rebound is the market's expectation of lower-than-expected CPI data to be released on Thursday in the United States.

The Oversold indicator shows that the market is anticipating a possible small-scale Rebound, which means that the short-term market trend will reverse. Currently, two out of three reversal indicators have shown bullish signals, and the RSI (Relative Strength Index) is temporarily reported at 38%, which means that shorts may also need to wait temporarily until the price of BTC encounters resistance in the range of $60,000 to $62,000, leading to another downturn in the market.

From the perspective of Technical Analysis, the price range of $55,000 to $56,000 is forming a support position. However, considering the deteriorating medium-term technical pattern, we predict that this will only be a short-term rebound and will not last long. It is particularly important to note that BTC has recently fallen during Asian trading hours, while the trend of performing relatively well during European and American trading hours continues.

Despite a 20% decline in BTC price in the past 30 days, the attitude of BTC futures traders remains relatively bullish since the approval expectation of ETH Spot ETF on May 20th. Since then, the open interest of BTC futures has risen from 260,000 BTC to 305,000 BTC, currently reported at 277,000 BTC, while the BTC price has dropped from $66,000 to $57,000 during the same period. The situation for ETH is similar, with the trading price staying around $3,068, but the open interest of ETH futures has increased from 2.6 million ETH to 3.1 million ETH.

Since May 24th, the net asset value (NAV) premium of Grayscale Ethereum Trust Fund has been significantly reduced to only -1.5%, compared to the peak in December 2022 (-60%), indicating the expectation of the approval of the Ethereum Spot ETF. The total asset under management of the Grayscale Ethereum Trust Fund is approximately 9 billion US dollars. The transformation from ETN to ETF means that investors will be able to freely redeem their shares.

Once ETH Spot ETF starts trading, Grayscale's redemption may cause significant selling pressure, similar to the situation of Grayscale Bitcoin Trust (GBTC) in January 2024. Since BTC Spot ETF began trading, GBTC's Assets Under Management has decreased by 47%. Therefore, it is predicted that Grayscale's outflow of funds may offset the inflow of funds from the other five ETF issuers.

Therefore, although the current price of ETH is still similar to when SEC approval was intended, there may still be potential 'Favourable Information' market conditions when S-1 is approved. As for ETH, the open contracts in the futures market show a strong bullish attitude towards ETH, while potential grayscale outflows may once again affect market trends.

Similar patterns also exist above BTC, that is, before the CPI data is released, the funds of Spot ETF have already entered. After BTC ETF recorded a net inflow of 143 million US dollars last week, the net inflow of ETF on Monday reached 295 million US dollars. This corresponds to the continuous net inflow of 4 billion US dollars observed during the release of CPI data in May and June, totaling 20 days, but it is worth noting that after the release of CPI data in June, BTC ETF experienced a net outflow of 1.2 billion US dollars.

The market expects that the CPI data to be released on July 11th will drop to 3.1%, which is in line with our expectations and the market's rebound expectations. If the core CPI can drop by 0.2% on a month-on-month basis, it is expected to still affect the price trend of BTC. However, potential selling pressures such as the German government, Mt.Gox, and the upcoming Bitgo cannot be ignored.

The news about 'FTX creditors may receive about $16 billion in compensation' has recently attracted widespread attention in the market. However, many of FTX's creditors have actually been acquired by professional bankruptcy compensation agencies, and these agencies will only follow the expected recovery of the creditors themselves and the arbitrage space, and are unlikely to reinvest the received dollars in the cryptocurrency market. We expect that the scale of funds flowing back into the market may be between $3.2 billion and $5 billion. In addition, in November 2022, when FTX was liquidated, the price of BTC was about $16,800, but now it is $57,000. The current pullback is not a tempting discount for FTX's creditors.

The deadline for FTX customers to vote on the bankruptcy liquidation plan is August 16th, and the related hearing will be held on October 7th, when Judge Dorsey will consider whether to approve the plan. It is worth mentioning that overseas creditors may face up to a 30% tax deduction in the final compensation.

In conclusion, we expect BTC to likely Rebound to around $60,000 next, and then to fall again to around $50,000, after which the market will enter a relatively complex trading environment. At that time, we expect the market to gradually digest the selling pressure from the German government and Mt.Gox from a psychological perspective, paving the way for some bullish events, such as the expected change in FTX's claims in mid-August and the potential impact of the upcoming US election on BTC.