At about 5:00 this morning Beijing time, the SEC officially approved the 19 B-4 form of the Ethereum spot ETF. (It seems that the SEC is working overtime on this. I have never seen any results announced at this time...)

The sharp fluctuations in the market from the night before to now (ETH has a price difference of nearly $500 between about $3,500 and $3,950) are enough to prove that investors are still confused and divided about the approval results.

In fact, the SEC-approved Form 19 B-4 is one of the two documents submitted by the issuer of the Ethereum spot ETF. Before the Ethereum spot ETF is officially launched, another document needs to be approved - the S-1 registration statement. This is also what we mentioned before.

But for the market, the SEC has approved Form 19 B-4, which means that the Ethereum spot ETF only needs a certain amount of time to be officially launched. From the SEC's documents, we can see that the relevant issues in S-1 have been clarified, and the issuer only needs to make timely revisions and follow up. This also means that the Ethereum spot ETF is not far from being officially launched.

Market Interpretation

The news that night was not as dramatic as when the Bitcoin spot ETF was approved, but this calmness had an even greater impact on the market.

According to Coinglass data, the total network liquidation in 24 hours was US$356 million, of which long positions were liquidated US$258 million and short positions were liquidated US$98.4177 million.

Since 8 o'clock last night, the price of Ethereum dropped from 3900 USDT to 3700 USDT, and then experienced a period of volatility. At 4 o'clock this morning, it plunged sharply to above 3500 USDT, and then broke through to 3900 USDT, but then plunged down to 3700 USDT. It has now slowly risen from 3700 USDT to 3800 USDT (as of writing).

The market is uncertain whether the SEC will approve the Ethereum spot ETF, resulting in drastic fluctuations in the market at any "slightest sign of trouble".

For example, at 4 a.m. today, the market fell sharply because Bloomberg analysts had expected the SEC to announce the results at 4 a.m., but there was no news.

For example, at the news level, the SEC approved the spot Ethereum ETF, and the market responded quickly and broke through to 3,900 USDT. However, when it was realized that only Form 19 B-4 was approved and the spot Ethereum ETF could not be officially launched, it fell to 3,700 USDT.

From this we can see that in the face of uncertain market news, the market is extremely fragile and the market stability is poor.

What's next?

From May 20, the Ethereum spot ETF went from being unpopular to being approved. Now, it is only a matter of S-1 registration statement away from being officially launched. This is a blessing from heaven for Ethereum and the crypto world.

Judging from the documents announced by the SEC, the S-1 registration statement may require some time for negotiation, such as pledge and security issues. However, most issuers have already revised the pledge part of the S-1 registration statement, and I believe that the subsequent progress can be accelerated.

Yesterday's article "Don't chase high prices for Ethereum. Even if it passes the surge, it won't soar at the moment" also elaborated on the different views of the two results. At present, the result of passing the surge is that Ethereum has not risen sharply, but has only recovered the part of the sharp drop. ETFs cannot be traded yet, so there is no incremental capital entering the market, that is, no new capital is entering the market, and it is still the turnover of funds in the market. Also because Ethereum soared 20% in one day the day before yesterday, it is very difficult to expect it to rise another 20% without new capital entering. If there is profit taking, it is normal to fall.

Several data were released last night, all of which were negative, showing that inflation is still high. The preliminary values ​​of the service industry PMI and the manufacturing industry PMI were higher than expected, which was negative.

The number of people applying for unemployment benefits is lower than expected, which shows that the economy is still strong, which is bearish.

On-chain data

The increase in BTC flowing into exchanges is bearish

Stablecoins have a slight outflow, which is a small negative

As the weekend approaches, there is a high probability of a correction and the possibility of a big rise is small.

The approval of the Ethereum spot ETF may start a new round of crypto asset ETFs. Next, the only major positive factor for the market is the Fed's interest rate cut. Although the specific time has not been determined, the expected positive factor will inevitably bring some room for growth in the next stage of the crypto market. At present, you can keep your position at 50%-60%.

Later, I will bring you analysis of leading projects in other tracks. If you are interested, you can click to follow. I will also organize some cutting-edge consulting and project reviews from time to time. Welcome all like-minded people in the cryptocurrency circle to explore together. If you have any questions, you can comment and ask questions