Summary Bitwise Ethereum ETF offers direct ETH exposure with a low 0.20% expense ratio, using Coinbase Custody for secure asset storage. Derivatives market analysis suggests the worst of the ETH correction is behind us, with leverage largely purged and limited downside expected. ETH is likely to consolidate between $3,300 and $2,800 in the short term, forming a base for a potential new upward stage. ETHW stands out as a cost-effective, attractive vehicle for Ethereum exposure versus peers, reinforcing accumulation at current levels. We analyze the current state of Ethereum and, from the perspective of the derivatives market, explain why we believe the worst of the correction is behind us and why this may be a good buying opportunity, assuming some short-term volatility. Fund Overview Bitwise Ethereum ETF ( ETHW ) is a commodity trust ETP whose investment objective is to offer the investor exposure to the value of the ETH cryptocurrency, minus operating expenses. On their website , they show that the total expense ratio is 0.20% for the investor. ETHW Fund Details (Bitwise ETHW Web) They do not use derivatives in their strategy; instead, the trust directly acquires ETH, which is held in custody by Coinbase Custody Trust Company, LLC, and these assets cannot be pledged or rehypothecated. As a result, investors benefit directly from the appreciation of Ethereum, which is reflected in the ETF’s NAV. Fund Holdings (Bitwise ETHW Web) Market Analysis Perpetual's Liquidation Maps ETH Exchange Liquidation Map (Coinglass) In the chart above , we have the Ethereum liquidation map for the major exchanges, clustered over a 30-day window. On the left Y-axis, it measures the cumulative quantities in the bars for each price zone, while the right Y-axis is the cumulative total of all the bars (red and green areas). Currently, we find two large liquidation clusters in the range of 3,300–3,100, with the volume on the short side being slightly larger (to the right of the current price). In the short term, the most likely path is that price first moves higher to clear the liquidation cluster around 3,300 and then corrects to flush out the long positions concentrated near 3,100. However, on the long side, a higher cumulative value is observed up to the levels of 2700. To better interpret these areas, we will use an expanded view of the liquidation map based on the exchange that handles the most volume: ETH Binance Liquidation Heatmap (Coinglass) In this chart , we see the accumulation of liquidation volume by price zone over the last six months. Warmer colors mean that, over time, the liquidation volume of leveraged positions has been accumulating in that zone, for example: ETH Binance Liquidation Heatmap (Coinglass) Zooming in, the first correction since August highs hit a first support zone in early September. Over the course of that week, two clusters of leveraged positions were formed, above and below the lateral range that had been formed. At this time, the first cluster to be liquidated was on the short side, with the bullish candle on September 12. At that point, while the cluster of long positions kept growing, immediately after “sweeping” the shorts, the price started to reverse, and the red candle on September 12 went on to liquidate the entire cluster that had formed over those days. In both cases, you can see how the heatmap goes from a warm color to a cold color. However, not all clusters are liquidated: clusters that have been formed for 6 months or more are often price reversal points and supports for the trend to continue. In the image that shows the entire 6 months, we see a large volume cluster that has acted as a rejection zone around $2,600–$2,700. ETH Binance Liquidation Heatmap (Coinglass) All things considered, in the short run the price will most likely range in a lateral range between $3,300 and $2,800. To support this view, we show the liquidation map again, but this time we only consider positions opened in the last three days. We can see how around 3,000 and 2,900 are accumulating large volumes. At the moment, we are in a situation similar to that at the end of August and the beginning of September, but on the other side, after a huge correction. While the worst is over, before drawing a new upward trend the chances are to see a consolidation over the next few weeks, retest the $2,900-$2,800 support and climb strongly to break the 3,200 and climb strongly to the next resistance levels of $3,500 and $4,300. Open Interest Crypto Open Interest (Coinglass) To find out if all the "excess" leverage that formed during the rise has been purged, with open interest we look at the number of contracts open for both the entire crypto market and Ethereum. ETH Open Interest (Coinglass) Currently, this is at the same level as when the rally began, so we confirm that the worst part is already behind us and we do not expect derivatives to be the main driver of any further sharp downside in the asset. In this way, this invites us to maintain the idea of forming a lateral range in the coming weeks that serves to finish liquidating clusters and form a base of accumulation in a spot that starts a new upward stage in the price. Conclusion In an ETH article we published on September 21 , we highlighted two entry zones for ETH. We are currently in the second of those zones, and after analyzing the derivatives, we reinforce the idea that this is a good opportunity to accumulate Ethereum. In the same way, in this other article that was published on November 7 , we review the arguments for staying bullish in the medium and long term. Peers (Seeking Alpha) Finally, Bitwise Ethereum ETF is an attractive way to gain exposure to the cryptocurrency compared with other Ethereum ETFs, with an expense ratio that is 0.05 percentage points lower than the main vehicle by AUM, ETHA.
