Yesterday, the price of Ether experienced a significant surge of over 20% after Eric Balchunas, a senior analyst at Bloomberg, expressed increased optimism about the approval of an Ethereum exchange-traded fund (ETF). Balchunas raised the likelihood of approval from 25% to 75%. As a result, the ETHBTC ratio, which measures Ethereum’s value compared to Bitcoin, rebounded from a three-year low. Additionally, open interest in Ethereum futures reached an impressive $14.68 billion, suggesting the potential for further increases in the near future.
Open interest in Ether futures has reached new heights due to growing hope for the approval of spot ETH ETFs in the United States. The notional open interest, which represents the total value of active Ether futures contracts, has surged by 25% to a new high of $14.6 billion in the last 24 hours, as reported by Coinglass. This surpasses the previous record of $13.2 billion set on March 15. This increase indicates a significant influx of capital into the Ether market, primarily driven by bullish investors. As the second-largest cryptocurrency by market capitalization, Ether’s price rose by nearly 17.5% to $3,700. The rise in both price and open interest confirms the ongoing upward trend.
Bloomberg’s ETF analysts recently revised their forecasts, increasing the probability of the U.S. Securities and Exchange Commission (SEC) approving spot ETH ETFs from 25% to 75%. At the same time, it was revealed that the SEC had urged exchanges interested in listing and trading potential spot Ether ETFs to expedite updates to their 19b-4 filings. This action by the regulator suggests an acceleration of the approval process.
Since this announcement, the crypto community has been filled with optimism, hoping that the SEC will approve a spot ETH ETF, which could indicate a more favorable regulatory stance towards cryptocurrencies in general.
According to prominent crypto analyst Van De Poppe, the bottom for ETH price has likely been reached as the ETHBTC ratio made a strong bounce from its low. This indicates a weakening bearish momentum for Ethereum.
The upcoming decision on spot Ethereum ETFs has also drawn attention to the expiry of ETH options on a weekly and monthly basis. On Deribit, a leading derivatives exchange, the open interest for Ether options on May 24 stands at $867 million. This figure rises significantly to $3.22 billion by May 31. In contrast, the open interest for monthly ETH options at CME is only $259 million, with OKX slightly lower at $229 million.
The regulator is scheduled to make a decision on the VanEck spot Ether ETF on May 23. The SEC must approve the 19b-4 filings and the S-1 registration statements before Ether ETFs can start trading on stock exchanges.
Looking ahead, Ether faced resistance at $3,720, but the bulls managed to prevent a decline below the 20-day EMA at $3,300. Buyers will make another attempt to break above the resistance line to confirm a clear trend. Currently, bears have less control over the ETH price chart. As of now, ETH price is trading at $3,665, experiencing a surge of over 18% in the last 24 hours.
The bulls are ready to make another push to break above the resistance line, which could indicate a shift in the short-term trend. The ETH/USDT pair could potentially climb towards $4,100 and even reach the higher resistance level at $4,500.
On the other hand, if the bears want to maintain control, they must drive the price below the 20-day EMA and push the pair below the critical support level of $3,000. If this occurs, the pair could fall to the support line of the channel.
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