Ethereum (ETH) experienced a 10.4% increase over the past week, reaching the $3,500 mark. However, it encountered strong resistance at this level and is currently trading at $3,416, down 0.20% in the past 24 hours. The United States Securities and Exchange Commission (SEC) approved two additional spot Ethereum exchange-traded funds (ETFs). Despite this, the derivatives market for Ethereum remains inactive.

The SEC has given preliminary approval to at least three issuers to start trading spot Ethereum ETFs on July 23, with a total of eight issuers awaiting final regulatory approval. Matt Hougan, Chief Investment Officer at Bitwise, predicts that Ethereum’s price will reach $5,000 by the end of 2024, citing factors such as Ethereum’s low inflation rate, minimal costs for validators, and the fact that 28% of its supply is locked in staking.

Despite these forecasts and the overall cryptocurrency market capitalization increasing by 43% year-to-date in 2024, Ethereum investors remain cautious. Typically, futures contracts trade 5-10% higher than spot markets due to their extended settlement periods. Currently, the annual premium for Ethereum’s fixed-month contracts is 11%, indicating moderate optimism. However, this indicator has not exceeded 12% in the past month, raising concerns amid the expected inflows from the upcoming spot ETF launch in the US. Similarly, Bitcoin’s basis rate also stands at 11%, suggesting no excessive bullishness among Ethereum investors.

The latest US Producer Price Index showed a 2.6% increase compared to the previous year, higher than the expected 2.3%. This indicates that the US Federal Reserve still faces challenges in controlling inflation, which could continue to dampen demand. Additionally, China’s disappointing annual GDP growth of 4.7% could negatively impact global stock markets.