Yesterday, Ether’s price soared by over 20% following comments from Eric Balchunas, a senior analyst at Bloomberg, who significantly raised the likelihood of an Ethereum exchange-traded fund (ETF) approval from 25% to 75%. Consequently, the ETHBTC ratio, which gauges Ethereum’s value relative to Bitcoin, rebounded from a three-year low. Simultaneously, open interest in Ethereum futures climbed to an impressive $14.68 billion, hinting at potential further increases shortly.
Ethereum’s Open Interest Touches New High
Ether (ETH) futures have hit new levels of popularity, driven by a renewed hope regarding the possible approval of spot ETH exchange-traded funds (ETFs) in the U.S. The notional open interest, representing the total dollar value of active Ether futures contracts, surged by 25% to a new high of $14.6 billion over the last 24 hours, as per Coinglass.
This surpasses the previous record of $13.2 billion set on March 15. This increase is indicative of a significant influx of capital into the Ether market, predominantly from bullish investors. As the second-largest cryptocurrency by market capitalization, Ether saw its price surge by nearly 17.5% to $3,700. The rise in both price and open interest is generally seen as a confirmation of the ongoing upward trend.
Late Monday, Bloomberg’s ETF analysts revised their forecasts, boosting the likelihood of the U.S. Securities and Exchange Commission (SEC) approving spot ETH ETFs from 25% to 75%. Concurrently, it was reported that the SEC had urged exchanges interested in listing and trading potential spot ether ETFs to expedite updates to their 19b-4 filings. This move by the regulator indicates an effort to accelerate the approval process.
Since that announcement, the crypto community on X has been filled with hopes that the SEC may be set to approve a spot ETH ETF, potentially indicating a more favorable regulatory stance towards cryptocurrencies in general.
The low is likely in on #Ethereum. pic.twitter.com/4FQCJuElv8
— Michaël van de Poppe (@CryptoMichNL) May 21, 2024
According to a prominent crypto analyst, Van De Poppe, the bottom for ETH price arrived as ETHBTC ratio made a solid bounce from the low of $0.04473 toward $0.05265. This suggests a weakening bearish momentum for Ethereum.
The upcoming decision regarding spot Ethereum ETFs has increased attention towards the ETH options expiries on a weekly and monthly basis. At Deribit, the premier derivatives exchange, the open interest for Ether options on May 24 stands at $867 million. This figure significantly rises 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 regulator is set to decide on the VanEck spot ether ETF on May 23. The SEC is required to approve the 19b-4 filings and the S-1 registration statements before ether ETFs can begin trading on stock exchanges.
What’s Next For ETH Price?
Ether faced rejection at the resistance line of $3,720, yet the bulls prevented a decline below the 20-day EMA (valued at $3,300). Buyers will make another attempt to break above the resistance line to validate a clear trend. Bears currently have less control on the ETH price chart. As of writing, ETH price trades at $3,665, surging over 18% in the last 24 hours.
The bulls are poised to try pushing the price over the resistance line again. Success in this effort could indicate an upcoming shift in the short-term trend. The ETH/USDT pair might then climb towards $4,100, and possibly reach the higher resistance level at $4,500.
On the other hand, if the bears intend to keep their control, they must drive the price below the 20-day EMA and further depress the pair below the crucial $3,000 support mark. Should this occur, the pair risks falling to the channel’s support line.