Summary Fidelity Ethereum Fund offers direct exposure to Ethereum, tracking its price 1:1, minus a 0.25% annual expense ratio. FETH benefits from Ethereum's current bullish trend, with technical analysis indicating potential for further upside and new price discovery zones. Key accumulation zones for FETH are identified between $3,200-$3,700, providing strong support and attractive entry points during pullbacks. Maintain or accumulate FETH on dips; take profits near $6,700-$7,200, aligning with Fibonacci targets and historical profit-taking levels. Introduction In today’s article, we’ll look at the Fidelity Ethereum Fund ( FETH ), which is one of the first ether spot ETPs/ETFs in the U.S., launched by Fidelity in 2024. The objective of this ETF is to reflect the valuation of the cryptocurrency Ethereum, discounting expenses (commission of 0.25% per year). To do this, they directly acquire Ethereum and guard it through Fidelity Digital Assets, following a 1:1 relationship with the underlying. In this way, upward or downward movements in the underlying will determine the gains or losses of those who invest in the asset. It is important to highlight for the investor that currently there are no ways to execute staking through the ETF analyzed. Analysis - Technical Point of View TradingView In this graph, we can see that Ethereum was already on an upward trend after soil formation and accumulation in September 2024. This trend was interrupted by a “risk-off” episode following the announcements of President Trump’s tariff policies, when the market feared the possibility of inflationary upswings and a deterioration in the labor market. Today, Ethereum's momentum is clearly bullish: structure of highs and lows higher than the previous ones, with two breakdowns of resistors (now supports) of significant volume, in mid-July and early August, which were successfully retested, achieving a new historical maximum. After which, a moment of “calm” has been preceded by swinging the price 15% wide from the all-time high. Looking only at the technical section, from Node Analytica in the short and medium term (6 months), we continue to conclude that the upward trend has not ended yet and that there are new price zones to be discovered. In this scenario we propose the purchase or reentry in setbacks, taking advantage of volatility in the short term and setting a target profit taking. The red lines on the graph represent the levels that the price could visit. In case of breaks, both E1 and E2 would be good zones to accumulate more Ethereum. At the top, the target level for profit taking would be in the area within the range of [6700-7200]: area aligned with 161.8% of Fibonacci, where in mature trends important profit taking is performed. Analysis - Market Fundamental CoinGlass Next, we will analyse the graph of the net inflows and outflows of the vehicle in question. This graph suggests two clear areas where investors have accumulated large amounts: 3,700-3,200 dollars. To reinforce the E1 purchasing zone theory, the inflow of capital into these zones usually acts as a support because it represents the price realized in the short term for investors. So, when these setbacks occur within an upward trend, investors tend to defend these entry points, and this demand drives creations by authorized participants, which helps to stabilize the spot and ETF price. In the event of a setback, however, this cluster will be an area in which to pay attention to inflows and outflows to see how the market reacts. If these investors maintain confidence in the trend and the asset by holding the position, or conversely, the unrealized losses will exert sufficient pressure for a cluster capitulation event to occur. CoinGlass CoinGlass To this day, open interest remains high. However, it has relented from the last peaks, recently marking a new record high, and has been consolidating at these levels for some time. To consider a break-even scenario, we will review the sequence of daily settlements. This second graph confirms that we come from several episodes of very large liquidations, both long and short. In recent weeks, except for the 12th day that a significant liquidation event did occur, the pace is more condensed within the deviations of the historical series. This current structure of IO and settlement volume often represents periods of calm that coincide with phases of redistribution or accumulation: the price moves in range, weak hands turn to the strong, and the market takes air to build the basis for the next impulse. Taking the current structure as a reference, it can be deduced that we are in a period of accumulation and forming the basis for a new upward momentum. Conclusion My conclusion, after this analysis, is to keep the asset if you have it in your portfolio. Wait patiently, see if there are episodes of downward volatility, to buy back at commented levels. If you do not have a portfolio, we recommend following the same strategy. In case the asset breaks up, it would only sell at the strength levels described in this analysis. Thank you for reading.
