Yesterday, the price of Ether experienced a significant surge of more than 20% following comments made by Eric Balchunas, a senior analyst at Bloomberg. Balchunas raised the likelihood of an Ethereum exchange-traded fund (ETF) approval from 25% to 75%. As a result, the ETHBTC ratio, which measures the value of Ethereum relative to Bitcoin, rebounded from a three-year low. Additionally, open interest in Ethereum futures reached an impressive $14.68 billion, suggesting the possibility of further increases in the near future.
The popularity of Ether (ETH) futures has reached new heights due to renewed hope surrounding the approval of spot ETH exchange-traded funds (ETFs) in the United States. The notional open interest, which represents the total dollar value of active Ether futures contracts, has surged by 25% to a new high of $14.6 billion within the last 24 hours, according to Coinglass. This surpasses the previous record set on March 15, which was $13.2 billion. This increase indicates a significant influx of capital into the Ether market, mainly from bullish investors. As the second-largest cryptocurrency by market capitalization, Ether experienced a price surge of nearly 17.5% to reach $3,700. Both the price surge and the increase in open interest validate the ongoing upward trend.
Late on Monday, Bloomberg’s ETF analysts revised their forecasts, increasing the likelihood of the U.S. Securities and Exchange Commission (SEC) approving spot ETH ETFs from 25% to 75%. It was also reported that the SEC had urged exchanges interested in listing and trading potential spot Ether ETFs to expedite updates to their 19b-4 filings. This regulatory action indicates an effort to accelerate the approval process. This announcement has generated hope within the crypto community that the SEC may approve a spot ETH ETF, which could indicate a more favorable regulatory stance towards cryptocurrencies in general.
According to prominent crypto analyst Michaël van de Poppe, the bottom for the ETH price has likely been reached. The ETHBTC ratio experienced a solid bounce from its low of $0.04473 to $0.05265, suggesting a weakening bearish momentum for Ethereum.
The upcoming decision regarding spot Ethereum ETFs has also drawn attention to ETH options expiries on a weekly and monthly basis. On Deribit, a premier derivatives exchange, the open interest for Ether options on May 24 stands at $867 million, which significantly rises 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 expected to make a decision on the VanEck spot Ether ETF on May 23. Before Ether ETFs can begin trading on stock exchanges, the SEC must approve the 19b-4 filings and the S-1 registration statements.
As for the future of the ETH price, Ether faced rejection at the resistance line of $3,720 but managed to avoid 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. At the time of writing, ETH price is trading at $3,665, experiencing a surge of over 18% in the last 24 hours.
The bulls are preparing to push the price above the resistance line once again. If successful, this could indicate a potential shift in the short-term trend. The ETH/USDT pair might then climb towards $4,100 and potentially reach the higher resistance level at $4,500. However, if bears maintain their control, they must drive the price below the 20-day EMA and push the pair below the crucial support mark of $3,000. In that case, the pair risks falling to the support line of the channel.