The SEC’s approval of ETH ETFs has led to significant price gains for Ether, contrary to predictions of an imminent price correction. This development follows the green light the US Securities and Exchange Commission gave for nine spot ETH ETFs to start trading, including the $9.3 billion Grayscale Investments trust.
Ether price surges ahead of ETF trading
Despite expectations of a price correction, as seen in previous cases like the launch of Bitcoin futures in December 2017 and Coinbase’s listing in April 2021, Ether’s price has shown resilience.
The ongoing surge has pushed ETH above the $3,500 mark, recovering some of its losses over the past month. Ether is up 8% over the last 90 days, outperforming Bitcoin during the same period. At the time of writing, ETH is trading at an average price of $3,519, with a 24-hour trading volume of $21.08 billion and a market capitalization exceeding $424 billion.
Bullish sentiments dominate
Data from Coinglass indicates a bullish sentiment among traders, with the total ETH Futures open interest (OI) increasing by over 4% in the last four hours, reaching approximately $15.29 billion.
This bullish trend is further supported by liquidating $5.6 million worth of long and short positions, with 83% of short bets being liquidated. This suggests that traders anticipating a price correction were caught off guard as Ether’s price moved in the opposite direction.
Impact of SEC approval on market dynamics
The Ethereum ETF approval process progressed significantly on May 20 when regulators encouraged exchanges to proceed with their 19b-4 filings. This move increased the probability of approval from 25% to 75%. By May 23, the SEC had approved exchange applications to list spot Ether ETFs, paving the way for trading and sparking investor interest.
The last week of May saw a notable surge in Open Interest (OI) for ETH futures, with an increase of 500K Ether as bullish investors capitalized on the positive news. During this period, ETH futures OI jumped from $8.8 billion to $13 billion, while Ether’s price surged from $3,065 to $3,959. This influx of bullish activity reflects the market’s optimistic outlook following the SEC’s approval.
ETH ETFs and market expectations
As trading for ETH ETFs begins, market analysts and traders closely monitor price movements. The approval of nine spot ETH ETFs has not only boosted Ether’s price but also strengthened its market position. The significant increase in trading volume and open interest demonstrates a robust market response and an optimistic future for ETH.
The SEC’s approval of ETH ETFs has led to unexpected price gains for Ether, defying predictions of a correction. With bullish sentiments dominating the market and significant trading activity, Ether’s performance in the coming weeks will be closely watched by investors and analysts alike. The approval of these ETFs marks a pivotal moment for Ether, reinforcing its position as a leading cryptocurrency.