ETH futures are showing a bullish stance above 3,795.5 according to tradeCompass. Key levels for partial profit on the long side include today’s VWAP at 3,815, a liquidity pool at 3,847, and yesterday’s VWAP at 3,874. If the price surpasses these benchmarks, traders look towards 3,911.5, 3,974, and 4,024.
On the bearish side, active only when prices fall below 3,757.5, partial profit targets lie at yesterday’s VWAP of 3,847 and other significant points such as the July 22 POC at 3,745 and the July 25 VAH at 3,735. The potential downtrend extends to 3,703, 3,680.5, and 3,656.
ETH futures are trading at 3,808, maintaining the bullish bias since it is above the crucial threshold. Despite the current bullish sentiment, a break below 3,757.5 would trigger a shift to a bearish outlook, making shorting opportunities viable.
tradeCompass offers structured insights using volume profile and VWAP methodologies. Volume Profile, with its POC, VAH, and VAL, provides insight into trading activity, while VWAP helps assess market sentiment. The model advises securing profits incrementally and advocates moving stops to entry after the second target to manage risk effectively, cautioning against placing stop-losses beyond the opposing threshold to avoid invalidating the setup.
Based on the provided market context, we see the current bullish bias as a launchpad for the coming weeks. The key is to hold above the 3,795.5 threshold, using it as a line in the sand for maintaining a positive outlook. A decisive break below the 3,757.5 level would require us to re-evaluate this entire bullish structure.
The broader market environment strongly supports this view, largely driven by anticipation around the launch of spot Ether ETFs. Recent reports from late May 2024 showed a record $2 billion inflow into crypto products, with much of the focus shifting to Ethereum in anticipation of these new investment vehicles. We should view the current price action as early positioning by larger players before these funds go live.
Derivatives data reinforces this positive outlook, with funding rates for ETH perpetual futures remaining positive, indicating that long-position holders are willing to pay a premium. Options market data from Deribit shows a significant concentration of open interest in calls with strike prices at $4,000 and $5,000 for the end of the quarter. This tells us that traders are not just cautiously optimistic; they are actively betting on substantial upside.
For a multi-week strategy, we should apply the logic of the compass to a wider timeframe, looking at the volume profile built over the last month. The area between $3,400 and $3,600 has formed a massive support shelf, acting as a macro version of a Value Area Low. As long as the price remains above this zone, we should treat any dips as buying opportunities rather than trend reversals.
Historically, we can look at the Bitcoin ETF launch in January 2024 for a potential roadmap. There was an initial “sell the news” event, with BTC dropping nearly 20% before institutional inflows began to build and fueled a rally to new all-time highs over the following two months. We must be prepared for similar short-term volatility in ETH once trading officially begins, using it to build positions for the longer-term move.
Therefore, our approach should be to use the identified bullish threshold to initiate or add to long derivative positions, targeting those higher liquidity zones around $3,974 and $4,024 as initial profit-taking areas. The methodology of moving a stop-loss to entry after the second target is hit becomes even more critical for these longer-term swing trades. This strategy allows us to participate in the expected upside while protecting our capital from any sudden, news-driven pullbacks.
