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The Ethereum (ETH) price experienced a choppy trading session on Thursday following the surprising news that the US Securities and Exchange Commission (SEC) had approved spot Ethereum ETFs. This decision was unexpected as the market had been anticipating a rejection of Ethereum ETFs just a week prior. The Ethereum price was volatile throughout the day, reaching highs near $4,000 and lows at $3,520 before settling around $3,800. Despite the fluctuations, the price was up 24% for the week, driven by rumors of a potential SEC u-turn that began circulating earlier in the week. The approval of 8 spot Ethereum ETFs marked a significant milestone for the cryptocurrency.

The approval of spot Ethereum ETFs by the SEC is expected to have a positive impact on the Ethereum price, similar to the surge seen in Bitcoin following the approval of spot Bitcoin ETFs earlier this year. Institutional investors entering the market through these ETFs are likely to increase liquidity in the Ethereum ecosystem, leading to further adoption, activity, and development. This approval solidifies Ethereum’s position as a leading smart-contract-enabled blockchain. With current record highs for Ethereum near $4,900, a 28% increase from current levels, many traders are optimistic about the future growth potential of Ethereum as a result of these approvals.

The confirmation of spot Ethereum ETF approvals could lead to short-term selling pressure as traders take profits, mirroring the reaction seen in the market when spot Bitcoin ETFs were approved. However, if demand for Ethereum ETFs remains strong once they are live, the Ethereum price could potentially surpass $4,000 in the near future. The uncertainty surrounding Ethereum’s regulatory status in the US had previously led many traders to short ETH against other cryptocurrencies. With the approval of spot Ethereum ETFs, this regulatory clarity could lead to the unwinding of these shorts, providing a positive tailwind for the market.

From a technical analysis perspective, Ethereum has broken out of its downtrend from March to mid-May and is now trading above its 21 and 50-day moving averages. This bullish momentum suggests that a retest of March highs near $4,100 is likely, with a potential push higher to 2021 highs near $4,900 once that level is breached. The approval of spot Ethereum ETFs has provided clarity on Ethereum’s classification as a digital commodity, similar to Bitcoin, further boosting confidence in the market. Despite the high-risk nature of cryptocurrencies, the approval of these ETFs has generated optimism among traders and investors regarding the future price trajectory of Ethereum.

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