Yesterday, the price of Ether experienced a significant surge of more than 20% following optimistic remarks from Eric Balchunas, a senior analyst at Bloomberg. Balchunas raised the probability of an Ethereum exchange-traded fund (ETF) approval from 25% to 75%. This led to a rebound in the ETHBTC ratio, which measures Ethereum’s value compared to Bitcoin, from a three-year low. Additionally, the open interest in Ethereum futures reached an impressive $14.68 billion, indicating the potential for further increases in the near future.
Ethereum’s Open Interest Reaches Record High
The popularity of Ether (ETH) futures has reached new heights due to renewed hopes for 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, surged by 25% to a new high of $14.6 billion in the last 24 hours, according to Coinglass. This surpasses the previous record of $13.2 billion set on March 15. The increase reflects a significant influx of capital into the Ether market, primarily from bullish investors. As the second-largest cryptocurrency by market capitalization, Ether saw its price rise by nearly 17.5% to $3,700. The uptick in both price and open interest is viewed as a confirmation of the ongoing upward trend.
Late on Monday, Bloomberg’s ETF analysts revised their forecasts, raising 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 encouraged exchanges interested in listing and trading potential spot ether ETFs to expedite updates to their 19b-4 filings. This regulatory move suggests an attempt to hasten the approval process. Following this announcement, the cryptocurrency community on X expressed optimism that the SEC might approve a spot ETH ETF, potentially signaling a more favorable regulatory stance towards cryptocurrencies in general.
According to crypto analyst Van De Poppe, the lowest point for the ETH price was reached as the ETHBTC ratio made a strong bounce from $0.04473 to $0.05265, indicating a weakening bearish momentum for Ethereum.
The impending decision on spot Ethereum ETFs has drawn attention to ETH options expiries on a weekly and monthly basis. On Deribit, the leading derivatives exchange, the open interest for Ether options on May 24 stands at $867 million, which 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 SEC is scheduled to decide on the VanEck spot ether ETF on May 23. Approval of the 19b-4 filings and the S-1 registration statements is required before ether ETFs can commence trading on stock exchanges.
What Lies Ahead for ETH Price?
Ether faced resistance at the $3,720 level, but the bulls prevented a decline below the 20-day EMA at $3,300. Buyers are expected to make another attempt to break above the resistance line to confirm a clear trend. The bears currently have less control over the ETH price chart. At present, ETH is trading at $3,665, marking an increase of over 18% in the last 24 hours.
The bulls are preparing to push the price above the resistance line once more. A successful breakthrough could indicate a potential shift in the short-term trend. The ETH/USDT pair may then climb towards $4,100 and potentially reach the higher resistance level at $4,500.
Alternatively, if the bears aim to maintain control, they must push the price below the 20-day EMA and further below the crucial support level of $3,000. In such a scenario, the pair risks falling to the support line of the channel.
Tags: BTC, ETH