Ethereum Under Scrutiny: Price Nears Critical Breakout as BlackRock Applies for Staked ETH ETF

After a period of speculation, BlackRock, the largest asset manager in the world, has formally submitted a filing for a staked Ethereum (ETH) Exchange-Traded Fund (ETF) with the U.S. Securities and Exchange Commission (SEC). With this positive news, Ethereum's price is currently trying to break through a two-month resistance level, which could lead to a possible retest of higher price points.

Key Takeaways

BlackRock has filed for a staked Ethereum ETF, drawing attention from the crypto community.
The proposed fund aims to stake a large portion of its holdings and distribute rewards.
Ethereum's price is attempting to break through a crucial downtrend line after holding the $3,000 support level.
Analysts suggest increasing potential for Ethereum's price to retest higher levels if certain resistance points are reclaimed.
Ethereum's market dominance remains stable within its consolidation range, indicating potential future growth.

The crypto landscape remains dynamic, and these developments surrounding Ethereum and BlackRock's ETF application could have significant implications.

Ethereum, ETH, Crypto

BlackRock Submits Application for Staked Ethereum ETF

BlackRock has submitted an S-1 form to the U.S. SEC to seek approval for its iShares Ethereum Staking Trust (ETHB). This trust aims to reflect the performance of ether's price while also providing rewards from staking a portion of the Trust’s ether when legally feasible.

Filed on December 5, the registration details that the proposed fund intends to stake between 70% and 90% of its Ethereum holdings, with staking rewards distributed to stakeholders at least on a quarterly basis. Coinbase Custody Trust will act as the custodian for the Trust's ETH holdings, while Anchorage Digital Bank may serve as an alternative custodian. The Bank of New York Mellon will manage the Trust's cash holdings and oversee its administration.

Importantly, BlackRock's ETHB will function separately from its existing spot ETH fund, the iShares Ethereum Trust ETF (ETHA), which is the largest in this category with assets under management totaling $11 billion.

The crypto community began speculating about BlackRock’s potential staked ETH fund after they registered the name in Delaware last month.

In a report from November, 10x Research commented that the launch of a staked Ethereum ETF by BlackRock would likely attract even more “scrutiny” on the economics of Digital Asset Treasuries (DATs), as retail investors may shift to a more affordable yield source. The report pointed out that many investors often overlook that the embedded costs within DATs “far exceed” the management fees that firms like BlackRock charge for their Bitcoin (BTC) and ETH ETFs.

Ethereum Approaches Crucial Downtrend Resistance

As the week kicked off, Ethereum's price made an effort to reclaim a significant area, maintaining support around the $3,000 mark despite weekend market volatility. The cryptocurrency experienced a nearly 3% increase, reaching $3,180 before experiencing a slight pullback on Monday.

Analyst Ali Martinez noted that “it’s time to pay attention to ETH,” highlighting its approach towards a crucial level that could propel the price into higher ranges. A chart indicated that Ethereum had briefly escaped its two-month downtrend line, which had been acting as resistance since early October.

During this period, Ethereum made two prior attempts to break beyond this resistance, both times faced with rejection. On Monday morning, it made another brief jump above the trendline before being turned away once more.

Nevertheless, should Ethereum reclaim the $3,120-$3,130 levels and convert the downtrend into a support level, it may establish a base for retesting the $3,200-$3,300 range, which represents the lower boundary of its price levels for Q3 and early Q4.

Additionally, analyst Rekt Capital remarked that Ethereum's market dominance (ETHDOM) remains within its macro consolidation range, with support holding at 11.67%. He stated that if “ETHDOM can stay above 10.05%, it should be set for increasing dominance levels in the market.”

The analyst went further to suggest that while history indicates the possibility of a 2.5% drop to the lows of the consolidation range, this decline would occur “within the context of a broader move toward 18%-20%” in the future.

At the time of writing, Ethereum is trading at $3,114, reflecting a 13.7% gain on the weekly timeframe.

Ethereum, ETH, ETHUSDT
Performance of Ethereum on the one-week chart. Source: ETHUSDT on TradingView