On-chain analytics firm CryptoQuant warns that ETH prices could be volatile if pending Ethereum spot ETFs experience volatility.

The company warned that ETH could experience “significant price adjustments” if the SEC denies the ETH ETF application or delays the approval process.

Furthermore, high flows into exchanges could create ETH price volatility in the coming days. Amid rumors of the approval of a spot ETH ETF, inflows to exchanges have reached 62,000 ETH, the highest since March.

Pressure to increase prices

Despite the possibility of a drop, ETH price has been rising for several days following rumors that the SEC will approve spot ETFs related to this digital asset.

Ethereum was trading at $3,748 at press time, up 23.4% in 7 days, according to data from Coingecko.

CryptoQuant said traders created bullish price pressure by opening long positions in the futures market in anticipation of higher prices, pushing ETH open interest from 2.8 to 3.2 million ETH, highest since January 2023.

This activity leads to a short squeeze and liquidation of shorts in series.

Long-term holders of ETH, or accounts that hold but do not sell ETH, also create upward pressure on the price by purchasing large amounts of ETH. Long-term holders bought more than 100,000 ETH in a single day, the highest daily amount since September 2023.

Long orders dominate the ETH perpetual futures market with a buy/sell ratio above one, adding pressure to the market.

Liquidation 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 is pending

The SEC must decide on VanEck's spot ETH ETF proposal by May 23, but could decide on similar applications at the same time.

The approval process is still ongoing. On May 21, Cboe filed rule 19b-4 changes on behalf of five ETH ETF issuers. Nasdaq also amended 19b-4 filings for BlackRock, while NYSE Arca filed updates to Grayscale's Ethereum Mini Trust and Bitwise's application.

FOX Business reporter Eleanor Terrett reports that the SEC and issuers are now entering into discussions surrounding S-1 registration statements. Bloomberg ETF analyst James Seyffart believes the funds may not launch for weeks or months after initial approval.

*Short squeeze is a phenomenon that occurs when the price of an asset increases rapidly and strongly, forcing investors who have shorted that asset to buy it back to cut losses and avoid larger losses. When many investors buy back together, this creates strong buying pressure, pushing asset prices even higher, causing a rapid price increase cycle. This phenomenon often occurs when positive information or unexpected events impact the market, causing asset prices to increase suddenly.

Source: https://tapchibitcoin.io/cryptoquant-canh-bao-ve-kha-nang-dieu-chinh-gia-va-bien-dong-cua-ethereum-neu-viec-phe-duyet-etf-gap- truc-trac.html