• Over $108 million is liquidated from Ethereum as Mt. Gox pays back creditors.

• As the debut of the spot ETH ETF approaches, Grayscale Ethereum Trust shifted to trading at a premium to net asset value.

• Given that key support may prove crucial in the next few days, Ethereum may start to consolidate.

Following the BTC repayment from Mt. Gox, Ethereum (ETH) saw an almost 5% decline on Friday, leading to more than $108 million in ETH liquidations. The supply of the repayment exacerbated the downward momentum on Bitcoin, which spread to alternative tokens like ETH.

Daily digest market movers: Mt. Gox headwind, ETHE discount

Today, the now-defunct exchange Mt. Gox started paying back its debts to creditors after transferring roughly $84.87 million in Bitcoin to the hot wallets of Japanese exchange Bitbank. The action exacerbated the general pessimistic attitude in the cryptocurrency market as altcoins sharply dropped, with Ethereum leading the way.

Because of the impending spot ETH ETF launch, many anticipated that ETH would be less impacted by the general market attitude. However, bears may have gained momentum because of the Securities & Exchange Commission’s (SEC) tardiness in approving issuers’ S-1 drafts.

Spot ETH ETF issuers’ 19b-4 forms were approved by the SEC on May 23, but the products can’t be traded until their S-1s are approved. VanEck, BlackRock, Bitwise, Grayscale, 21 Shares, Fidelity, Franklin Templeton, and Invesco are among the potential issuers.

Because investors cannot cash in their shares from the trust, they must sell them to sell their positions, which has resulted in ETHE trading at a discount. In particular, the discount spiked between March and May following reports of the SEC looking into Ethereum 2.0.

But after the SEC approved the 19b-4 filings from potential issuers, investors snapped up the cheaper shares, and the gap closed and is now at a premium. When spot ETH ETFs launch, the $9.5 billion ETHE trust will be converted to an ETF.

ETH technical analysis: Ethereum may begin consolidation

Friday’s price of Ethereum is at $2,984, down about 5% from the previous day. The additional drop from Thursday’s lows caused massive ETH liquidations, clearing the market of $134 million worth of open holdings. While shorts fell short of $26 million, long liquidations increased to $108.4 million.

ETH broke below the $2,852 key support level but quickly posted a weak exhaustion liquidity void, considering this represents a key demand zone for the top altcoin. ETH’s price has now dropped to levels seen in May when most investors anticipated a spot ETH ETF denial in response to reports that the SEC was investigating Ethereum 2.0.

Since mid-February, ETH has not been able to maintain a sustained move below this level of support. Furthermore, according to data from IntoTheBlock, investors bought roughly 57.02 million ETH between $2,268 and $2,909.

With the weekend drawing near, ETH might not be able to withstand a prolonged drop below the $2,852 support. Around the $2,852 to $3,367 price range, where it traded for roughly five weeks (April 12 – May 19), is probably where ETH will start its horizontal trend.