- The price of ETH may be impacted by both significant exchange inflows and approval delays.
The on-chain analytics company CryptoQuant issued a warning, stating that if forthcoming spot Ethereum ETFs run into problems, ETH values may change.
It cautioned that if the SEC rejects applications for ETH ETFs or holds up the approval process, ETH would experience a “significant price correction.”
Furthermore, in the upcoming days, there may be volatility in the price of ETH due to large exchange flows. Exchange movements hit 62,000 ETH, the biggest since March, amid speculations of impending spot ETH ETF approvals.
Price pressure rising
Prices for ETH have increased over the past few days despite potential decreases due to speculation that the SEC will permit spot ETFs linked to the digital asset.
Ethereum was trading at $3,735—up around 21% in a day.
According to CryptoQuant, traders aggressively initiating long positions in the future market in anticipation of rising prices created upward price pressure, pushing the open interest in ETH from 2.8 to 3.2 million ETH, the largest since January 2023.
Short squeezes and cascading short liquidations were the outcome of the action.
By acquiring a sizable quantity of ETH, permanent ETH holders—accounts that possess but do not sell ETH—also contributed to price pressure. In a single day, permanent holders purchased almost 100,000 ETH, the most they have done so since September 2023.
With a taker buy/sell ratio above one, purchase orders dominate the ETH perpetual futures market and exert additional pressure on the price.
9,300 ETH was the biggest hourly volume of ETH short position liquidations in 2024, resulting in a short squeeze in future markets.
Pending applications
VanEck’s spot ETH ETF proposal is up for decision by the SEC on May 23, however, other applications may be decided upon concurrently.
The procedure for approval is still under progress. Five ETH ETF issuers filed a request for amendments to the 19b-4 rule with Cboe on May 21. In addition, Nasdaq has updated its 19b-4 filings for BlackRock, and NYSE Arca has filed revisions for Bitwise’s application and Grayscale’s Ethereum Mini Trust.
Eleanor Terrett, a reporter for FOX Business, said that discussions over S-1 registration statements are currently taking place between the SEC and issuers. James Seyffart, a Bloomberg ETF analyst, predicts that funds would not begin trading for several weeks or months following initial approvals.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
