As the cryptocurrency community eagerly awaits the verdict on Ethereum (ETH) exchange-traded funds (ETFs), the insights shared by legendary trader John Bollinger have sparked widespread interest. Bollinger, renowned for his creation of the Bollinger Bands—an influential technical analysis tool—has offered his perspective on the ETH market dynamics.

In a recent tweet, Bollinger disclosed his inquiries into Grayscale Ethereum Trust (ticker ETHE), a pivotal indicator in the Ethereum ETF speculation frenzy. As anticipation mounts, Grayscale Investments eyes the conversion of its Grayscale Ethereum Trust to an ETF pending SEC approval. The discount of the trust to its underlying Ethereum holdings has notably dwindled, signaling heightened market optimism. This decline in discount echoes a pattern observed in January preceding the SEC's approval of Grayscale's Bitcoin Trust conversion.

However, Bollinger suggests that the market may have already factored in the bulk of the news surrounding the Ethereum ETF. Notably, he points out that the discount, particularly concerning Grayscale's ETHE, has significantly narrowed. This narrowing discount suggests that the market has absorbed much of the anticipated positive sentiment.

In light of this assessment, Bollinger perceives the current market move as overextended, implying a potential peak followed by a corrective phase. Consequently, he disclosed in his tweet, tagged ETHUSD and ETHBTC, that he has trimmed his position in response to this market sentiment.

As the countdown to the Ethereum ETF decision continues, Bollinger's insights provide valuable context for market participants navigating the dynamic cryptocurrency landscape.