SEC Approves Ethereum ETFs, ETH Price Prediction: What’s Next?
The Ethereum (ETH) price is experiencing volatile trading as news breaks that the US SEC has approved spot Ethereum ETFs. This unexpected decision has surprised the market, which had previously anticipated the rejection of Ethereum ETFs this week.
As of the latest update, the Ethereum price is hovering around $3,800. While this is a significant drop from earlier session highs of $4,000, it is also a notable increase from earlier session lows at $3,520.
Throughout the week, the Ethereum price has shown a 24% increase.
Rumors of the SEC’s change in stance began circulating on Monday, and in the following days, there was extensive communication between ETF issuers and the SEC. Traders responded by aggressively bidding up the Ethereum price, anticipating that ETFs would contribute to the growth of the Ethereum ecosystem.
The climax came on Thursday when the SEC approved eight spot Ethereum ETFs.
The approval of spot Ethereum ETFs in the US will likely drive up the Ethereum price as institutional investors enter the market. Similar to what happened with spot Bitcoin ETF approvals earlier this year, the Ethereum price could see a surge. Its current record highs are around $4,900, which is a 28% increase from its current levels.
This influx of liquidity into the Ethereum ecosystem is expected to stimulate further adoption, activity, and development. Ethereum ETFs will solidify Ethereum’s position as the leading blockchain for smart-contract functionality.
However, the confirmation of spot Ethereum ETF approval may lead to some short-term selling pressure, as was observed when spot Bitcoin ETFs were approved. Some traders prefer to wait for confirmation of a positive market catalyst before taking profits.
Assuming there is significant demand for Ethereum ETFs upon their launch, ETH could soon surpass the $4,000 mark. The uncertainty surrounding Ethereum’s regulatory status in the US had led many traders to short ETH compared to other cryptocurrencies. Earlier this year, there were concerns that the SEC would classify ETH as a security. However, with the approval of spot Ethereum ETFs, it is now clear that ETH is considered a digital commodity, much like Bitcoin.
This approval could lead to the unwinding of many short positions, which would provide ongoing support for the market. Additionally, technical analysis suggests that since breaking its downtrend from March to mid-May and surpassing its 21 and 50-day moving averages, Ethereum is likely to retest its March highs near $4,100. Once this level is breached, a swift move towards the 2021 highs near $4,900 is probable.
It is important to note that investing in cryptocurrencies carries a high level of risk. This article is provided for informational purposes only and should not be considered investment advice. There is a possibility of losing all invested capital.
