Ethereum Market Forecast:  ETH/USD regains ground, not out of the wood yet

• Grayscale’s Ethereum Trust shares lost 50%.
• ETH/USD recovered from the intraday low, but the upside is limited.

ETH/USD is changing hands at $234.50, down nearly 6% in the recent 24 hours. The second-largest digital asset has been moving in sync with the market and touched the intraday low at $227.26 during early Asian hours. Currently, the coin is moving within a short-term bullish trend amid high volatility.

The shares do Grayscale Ethereum Trust collapse

While ETH edged higher since the start of the week, the shares of the Grayscale Ethereum Trust lost 50% of their value. Nic Carter, co-founder of researcher Coin Metrics, believes that hedge-funds and other so-called accredited investors have been liquidating their positions in the fund that invests in the second-largest cryptocurrency. 

Despite the massive sell-off, the fund is still grossly overvalued. The net asset value premium surged more than 800% since launch and dropped to about 360% in the recent couple of weeks. Each share represents 0.094 Ether (ETH) and costs $102.5, which means that the implied price of ETH is over $1,000. Investors are still willing to overpay to get access to ETH through the trust on the OTC markets.

 ETH/USD: Technical picture

 On the intraday charts, ETH/USD returned inside the 1-hour Bollinger Band. However, the further recovery is capped by 1-hour SMA200 and the middle line of the 1-hour Bollinger Band at $234.00. Once it is out of the way, the upside is likely to gain traction with the next focus on SMA100 at $237.50 and psychological $240.00 with SMA50 on approach. This area served as a strong resistance during the previous consolidation period.

On the downside, the local support is created by $230.00. If it is broken, the sell-off may continue to the intraday low of $227.27 and then to $220.00.

ETH/USD 1-hour chart