Approval delays and high exchange inflows may impact the price of EThH.
On-chain analytics firm CryptoQuant warned that ETH prices could fluctuate if pending Ethereum ETFs encounter uncertainty.
It warned that ETH could experience a “significant price correction” if the SEC rejects the ETH ETF application or delays the approval process.
Additionally, high exchange flows may cause ETH price volatility in the coming days. Amid rumors of pending spot ETH ETF approval, exchange flows reached 62,000 ETH, the highest since March.
Upward price pressure
Despite the possibility of a drop, ETH prices have been rising for several days following rumors that the SEC will approve a spot ETF tied to the digital asset.
Ethereum was trading at $3,735 at press time on May 22, up about 21% over 24 hours, according to CryptoSlate data.
CryptoQuant said traders generated upward price pressure by aggressively opening long positions in the futures market with expectations of higher prices, pushing ETH open interest from 2.8 to 3.2 million ETH, the highest since January 2023.
These activities result in short-term liquidations and short-term liquidations.
Permanent ETH holders, or accounts that own but do not sell ETH, also generate upward price pressure by purchasing large amounts of ETH. Holders still purchased more than 100,000 ETH in one day, the highest daily amount since September 2023.
Buy orders dominate the ETH perpetual futures market with taker buy/sell ratios above one, putting further pressure on the market.
Liquidations of ETH short positions reached 9,300 ETH, marking the highest hourly volume in 2024 and causing a short squeeze in the futures market.
Application pending
The SEC must rule on VanEck's spot ETH ETF proposal by May 23 but may rule on similar applications simultaneously.
The approval process is still ongoing. On May 21, Cboe filed changes to rule 19b-4 on behalf of five ETH ETF issuers. Nasdaq has also amended its 19b-4 filing for BlackRock, while NYSE Arca has filed updates for Grayscale's Ethereum Mini Trust and Bitwise applications.
FOX Business reporter Eleanor Terrett stated that the SEC and issuers are now entering discussions around the S-1 registration statement. Bloomberg ETF analyst James Seyffart believes the fund may not launch for weeks or months after initial approval.
ETHEREUM MARKET DATA
At the time this news was published 21:49 UTC IN MAY. AUGUST 22, 2024 , Ethereum is ranked#2by market cap and its price is down 0.05% over the last 24 hours. Ethereum has a market capitalization of $449.68 billion with a 24-hour trading volume of $25.33 billion.
