Key Points
- A Coinbase analyst estimates a 30-40% chance of approval for Ethereum ETFs.
- Ethereum’s market dominance and performance are at a low, indicating a need for positive change.
A research analyst from Coinbase, David Han, has estimated that there is a 30-40% chance of approval for Ethereum Exchange Traded Funds (ETFs).
Ethereum’s Struggle
The dominance and performance of Ethereum are currently low, indicating a need for a positive shift soon. The U.S. Securities and Exchange Commission (SEC) is unlikely to approve any applications for spot Ethereum ETFs due to several factors. However, the SEC has not provided any official confirmation of its plans.
There is still a possibility, albeit slim, that the SEC may approve these ETFs. The question then arises: is the market prepared for such an impact? How would Ethereum’s price react?
Possible Upside
In the monthly outlook report published by Coinbase on May 15th, Han suggested that there could be a surprising upside if the ETFs are approved. Similarly, Bloomberg ETF analyst Eric Balchunas has estimated his approval odds at 35%. A survey from Polymarket indicated a general estimate of 7% approval odds among the crypto community.
Larry Fink, CEO of BlackRock, expressed a somewhat optimistic sentiment during a CNBC appearance, suggesting that the SEC might approve spot ETH ETFs even if it categorizes Ethereum as a security. If the SEC approves an Ethereum ETF, the market could experience an unexpected surge.
Ethereum’s SEC-proclaimed status as a security has negatively impacted investment sentiment. Consequently, Ether prices are likely to see very little action in the near future. Notably, Bitcoin’s price hardly reacted to its ETF approvals earlier this year.
The Funding Rate has been relatively low or negative recently, which could imply a cooling off of bullish momentum or increased caution among traders, especially during price dips. Furthermore, the increase in Open Interest despite lower trading volumes suggests that traders might be preparing for significant price moves ahead.
Ethereum’s trading chart shows a consistent bullish trend over a two-day period. The highest price point just above $3,160 could act as a short-term resistance level. Observing how the price reacts upon retesting this level could be critical for short-term investment strategies.
Given the strong upward momentum and successful price recovery post-retraction, if the market maintains its bullish sentiment, Ethereum could potentially break through the current resistance level.
