NEW DELHI (CoinChapter.com) — With Bitcoin (BTC) spot ETF approved, investors are now eyeing Ethereum spot ETFs as their next target. The resulting speculation helped the ETH price rally to its highest since May 2022 before correcting.
One of the driving forces behind ETH price’s recent rally to the positive market sentiment following BTC spot ETF approval. However, speculations of investment firms working on an ETH spot ETF have buyers entering the market in droves.
A key reason behind the optimism is that the BTC spot ETF approval sets a regulatory precedent, making it, in principle, easier to get approval for ETH spot ETF.
However, given that the SEC chair Gary Gensler pointed out that the decision in no way changes the regulator’s stance on crypto assets, it seems an ETH spot ETF could take time to enter the market. The SEC is due to decide on ETH ETFs in May 2024.
Another key aspect of Gensler’s statement was the reference to Bitcoin as a “non-security commodity,” which is why BTC spot ETFs got approved. However, ETH’s status remains murky, with no clarity as to whether it is a security or a commodity.
Yet, ETH supporters remained confident of an ETF approval in the works.
Market Experts Optimistic of ETH ETF Approval, With Some Exceptions
Anthony Scaramucci, founder of SkyBridge Capital, said in an interview with CNBC an ETH ETF was unlikely as long as Gensler remained at the helm of the SEC.
However, Ben Zhou, co-founder and CEO of Bybit, is more optimistic about an ETH spot ETF.
[BTC spot ETF approval] heralds a new epoch of institutional and wider crypto adoption, paving the way for an Ether ETF and mixed products like a Bitcoin and Gold ETF. It is a clear indicator that crypto’s inherent value as a global transaction system with near-instant finality and total transparency is being realized.
Zhou said in a written statement
Furthermore, Ryan Lee, Chief Analyst at Bitget Research, told CoinChapter BTC that ETF approval could help “expand the attributes of cryptocurrencies beyond BTC to include ETH and other tokens.“
Asset management firm Valkyrie’s chief investment officer stated that XRP and ETH ETFs could be the next to get the SEC’s rubber stamp. Additionally, Ripple Labs CEO Brad Garlinghouse believes the move could open the way for more adoption from institutional investors.
Naysayers include veteran Bitcoin hater Peter Schiff, who claimed ETFs were another way to “gamble” on Bitcoins and cryptos.
However, BlackRock CEO Larry Fink stated in a CNBC interview that he “sees value” in an ETH spot ETF. BlackRock filed for an Ethereum spot ETF in Nov. 2023. The chief of the world’s largest asset manager supporting an ETH ETF could attract more buyers to the market.
ETH Price Rally Buckles Under Selling Pressure
Meanwhile, the ETH price rally fell victim to profit booking as the token reached a resistance confluence of two ascending trendlines. One of the trendlines has rebuffed the ETH uptrend twice since Aug. 2022 (blue dashed line), and the other has troubled the ETH price since Sept. 2023 (black dashed line).
If the bearish pressure increases, the ETH price could drop to the support near $2,400. Breaching the immediate support might see traders shorting ETH with a price target near the 100-day EMA (blue wave) support near $2,100.
However, an ETH spot ETF approval could help the token break past the trendline resistance confluence and see Ether’s price consolidating near $2,810 before targeting the resistance near $3,140.
The RSI for ETH remained neutral, with a score of 68.86 on the daily charts.
