- Buying pressure on Ethereum is increasing with the launch of ETH futures on the Chicago Mercantile Exchange (CME).
- ETH derivatives on the CME could increase institutional adoption.
Ethereum‘s price has had an impressive bull-run in recent months. After reaching a new all-time high, the price is reeling from the uncertainty of the launch of Ethereum futures on the Chicago Mercantile Exchange (CME) tomorrow, February 8. However, the bulls could score an unexpected victory.
At the time of publication, Ethereum is trading at $1,623 with a loss of 3.6% in the last 24 hours. On the weekly and monthly charts, ETH is posting gains of 18.2% and 31.9% respectively. The market cap stands at $185 billion.
Ethereum futures on the CME have driven the ETH price from $1,000 to current highs, monitor Cryptowatch records. Data from CryptoQuant supports this argument, with the platform recording a significant outflow of ETH from major exchanges.
Many analysts and traders have stated that investors may have bought ETH because of the “hype,” but may sell pre-launch or during the CME product launch. For Bitcoin, the CME derivatives have exerted a great influence on the market in 2017.
Therefore, the trader “Edward Morra” has built a strategy around the possibility that the ETH price drops. Morra believes this is likely and will take advantage of the drop to “buy the dip”. The trader made a comparison between the 2017 market and the current market:
Was thinking about ETH CME launch tomorrow. The biggest concern I see people have is comparison with BTC CME launch & how they “topped” the market in 17. Back then people thought it was gonna be bullish for BTC (instit coming) right now they think its bearish. See the difference?
Trader Michaël van de Poppe stated that the price of Ethereum has reached the next area in the Fibonacci extension by touching $1,650. Just like “Morra”, van de Poppe referred to the drop in the price of BTC when futures were introduced on the CME during 2017.
At that time, the bull cycle was at its peak and was more susceptible to a crash. Therefore, there is a difference between that time for BTC and the current one for ETH. However, van de Poppe believes that a “buy the rumor, sell the news” phenomenon could occur that would produce a drop in the short term.
On the 24-hour chart, van de Poppe has established support between $1,350 to $1,400. If ETH price stays in that range, it is likely to continue its uptrend, as the chart below shows.
Will Bitcoin’s history repeat for Ethereum?
Meanwhile, Arrington XRP Capital corporate partner Ninos Mansor dispels the bearish scenario for ETH. Contrary to other expectations, Mansor sees the launch of ETH futures on the CME as very bullish.
In conjunction with DeFi adoption and the increase in the amount of ETH staked in the Ethereum 2.0 deposit contract, Mansor stated that the cryptocurrency’s future contracts on the CME will pave the way for further institutional adoption.
By becoming arbitrageurs of the ETH contract premium price, it will create a “black hole” for the price in the spot market. In parallel, EIP-1559 is expected to be implemented on the mainnet. Both factors will lead to a crisis in the supply of the cryptocurrency and higher prices in the long run, as Mansor concluded:
With ETH-BTC above 0.038 and the dollar pair only just above the ATH, market momentum may ultimately bring these stories to the surface. Price first and the narrative of a supply-side crisis soon to follow.