The United States Securities and Exchange Commission (SEC) approved all spot Ethereum ETFs a few hours ago. This approval was expected to be the final catalyst to usher the cryptocurrency market into the highly anticipated 2024 ‘bull run.’ However, as of the time of writing, markets are in the red.
Also Read: SEC Approves All Spot Ethereum ETFs
All the cryptocurrencies in the top ten have tumbled over the past day, even though they were all on a high yesterday, before the approval. A similar pattern emerged in January when markets plunged in the days that followed the approval of spot Bitcoin ETFs.
So, why does it happen? Why is the crypto market down today?
Source: CoinGecko Crypto Market Sees a Correction
Just moments before the SEC made its decision, the crypto market experienced $120 billion in liquidations. Bitcoin fell far below its critical support level of $70,000. On the other hand, Ethereum remains far above its key level of $3,500. On-chain metrics show a massive inflow of cryptocurrencies to exchanges, which typically happens right before markets correct.
Also Read: Bitcoin Heads for $140K if History Repeats Itself
In the crypto community, some seem to believe that, much like their Bitcoin counterparts, Ethereum ETFs were never going to boost the market. The regulatory developments might not have had the expected impact on stabilizing the market.
Experts Predicted the Price Drop
A market downturn is a common reaction to a highly anticipated event, and investors look to capitalize on the news by selling off their holdings. Additionally, broader economic factors such as rising US Treasury yields and delays in expected Federal Reserve rate cuts have contributed to a risk-off sentiment in the market.
$BTC is Still moving inside the BOX..🏁A breakout from the green box could send Bitcoin to $100k.#Crypto #Bitcoin #BTC pic.twitter.com/QwofB1P4VX
— Captain Faibik (@CryptoFaibik) May 24, 2024
Experts like CryptoQuant were already expecting the correction. Renowned analyst Faibik said he isn’t moved by the tumble and still strongly believes Bitcoin will top $100k this year. An analysis from prominent expert Michael van de Poppe states:
Why is the market not moving for Ethereum? Well, the approval was already priced in due to the strong 20% move. It’s a waiting time until the listing takes place, and then the inflow will provide whether there’s a strong continuation upwards.
Meanwhile, institutions like Standard Chartered and Bernstein remain bullish on the long-term prospects of crypto markets, expecting Bitcoin to hit $200,000 and Ether to top $7,000.
It Is a Bullish Week for Crypto
This week has been bullish for the market. First, the US House of Representatives passed the FIT21 bill. This first-of-its-kind bill aims to legalize blockchain and cryptocurrencies in the country. Second, the Federal Reserve was recently banned from creating a CBDC.
Experts have been vehemently against the CBDC for years, citing issues like invasion of privacy and surveillance by the American government. Congress called Biden out in particular for wanting to use the CBDC as a weapon to control Americans’ finances.
The SEC’s approval of all eight Ethereum spot ETFs was the biggest news of all.
“We’re about to see an insane volatility,” predicted van de Poppe immediately after the news of approval came.
Cryptopolitan reporting by Jai Hamid
