Surge in ETH Price Amid Rising Expectations for Spot Ethereum ETF Approval in U.S.
Summary:
The price of Ether (ETH) has risen by 26% amid rising expectations for the approval of spot Ethereum ETFs in the U.S., reaching heights unseen since mid-March. The uptrend is supported by on-chain metrics, fundamental factors, and increasing open long ETH positions in futures markets. Reports suggest that traders are opting for more exposure to ETH over Bitcoin, with the ETH/BTC trading pair also on an uptrend. Increased ETH purchases by permanent holders are seen following the rumors of a forthcoming ETF approval. With retail investor sentiment turning positive, the price of ETH is likely to continue its upward trajectory.
Surging anticipation for the approval of spot Ethereum ETFs in the U.S. has spurred a 26% increase in the price of Ether (ETH), reaching levels unseen since March 15. While ETH price has dipped marginally from the $3,800 peak, the prospect of SEC's nod for a spot Ethereum ETF, along with fundamental and on-chain metrics, hint at an enduring altcoins uptrend.
Further bolstering ETH's upward trajectory is the growth of open long ETH positions in the futures market. As per the on-chain market intelligence firm CryptoQuant, the total open interest of Ethereum in the derivatives market rose from 2.8 million to 3.2 million ETH within hours on May 20, instigated by rumors of the U.S. SEC revising its stand on the approval of spot Ethereum ETFs. This marks the highest open interest since January 2023.
Notably, ETH open interest in dollar terms has now peaked to a record $14.68 billion, indicating a compelling trend and sustained investor confidence in Ethereum.
Amid the likelihood of a spot Ethereum ETF being sanctioned this week, CryptoQuant analysts have observed a surge in buy ETH orders in the perpetual futures market over other order types. They note that traders are increasingly opting for more exposure to Ethereum over Bitcoin, visible in the Ethereum-Bitcoin Open Interest ratio rising from 0.54 to 0.67 on May 20. This suggests that Ether's total open interest represents 67% of Bitcoin's.
Signifying a strengthening of Ether's price against BTC, TradingView data shows that the ETH/BTC trading pair rose from a trough of $0.04572 on May 20 to a two-month summit of $0.06471 on May 21.
In light of the potential ETF endorsement rumors, the demand for ETH appears to be back on track, evident in the increased acquisitions by Permanent Holders. CryptoQuant charts revealed escalated ETH purchases by these holders on May 20.
Concurring with these observations, analyst Ali Martinez shared a chart from Santiment showing a rise in ETH accumulation by its whales on the same day. Even as crowd sentiment towards Bitcoin and Solana stays bearish, the buzz surrounding Ethereum has soared to its peak since September 2023.
The Crypto Fear and Greed Index from Alternative.me has also entered the "extreme greed" zone at 76, leading to a positive feel about cryptocurrencies among retail investors. Given the anticipated approval of spot Ethereum EFTs by the SEC this month, ETH price is set to maintain its uptrend.
Published At
5/23/2024 1:30:00 AM
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