By
Godfrey Benjamin
April 26th, 2024
The anticipation of a potential Ethereum ETF approval in the US has been a major catalyst behind the recent bullish sentiment surrounding ETH.
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has surged to new heights, breaking through the $2,800 mark and reaching a level not seen since May 2022. Traders are now eyeing a potential target of $3,500, driven by expectations surrounding the potential approval of a spot Ethereum Exchange-Traded Fund (ETF) in the United States.
Ethereum’s Recent Price Rally
At the time of writing, ETH is trading at $2,790, reflecting a 1.5% increase over the past day, with a market capitalization of $335 billion. The recent rally in Ethereum price comes amid signs of recovery in the broader crypto market. The growth is pivotal for ETH, whose price slumped to as low as $1,378.53 in the past year.
This milestone indicates the growing interest and confidence in ETH as investors and traders seek opportunities in this expanding space. Analysts believe that Ethereum could be on its way back to its previous highs, with the token’s lifetime peak reaching nearly $5,000 in November 2021.
Alex Kuptsikevich, a Senior Market Analyst at FxPro, expressed optimism about Ethereum’s potential trajectory, stating:
“Possibly as part of a new wave of growth, ETH could quickly find itself approaching $3,500 – returning to the April 2022 peak.”
He emphasized the impressive buying interest in ETH, with a 15% surge in less than nine days indicating bullish sentiment among investors.
Despite Ethereum’s recent surge, it’s essential to note that the crypto market is highly volatile, and price movements can be swift and unpredictable. Ethereum rose as much as 7% over 24 hours before experiencing a slight retreat. However, open interest, which measures the number of unsettled futures contracts tracking Ethereum prices, has risen to over $9 billion.
According to Coinalyze data, bullish bets currently account for 57% of futures positions in the past 24 hours, indicating a prevailing bullish sentiment among traders.
Anticipation of Ethereum ETF Approval
The anticipation of a potential Ethereum ETF approval in the US has been a major catalyst behind the recent bullish sentiment surrounding ETH. Senior ETF analyst Eric Balchunas at Bloomberg estimates a 70% chance of approving an Ethereum spot ETF by May.
Notable financial institutions such as BlackRock Inc (NYSE: BLK), Franklin Templeton, Grayscale Investments, and Fidelity Investments, among others, have already submitted applications for an Ethereum ETF.
Meanwhile, these institutions already offer spot Bitcoin ETFs, introduced in mid-January, which have amassed $11 billion worth of BTC, contributing to the surge in Bitcoin’s price beyond $52,000.
Market observers believe that a similar dynamic could drive demand for ETH if ETFs are approved. Additionally, the prospect of regulated Ether products offering yearly rewards of up to 5% through staking presents another bullish catalyst. Unlike Bitcoin, which does not offer such rewards, Ethereum stands to benefit from the introduction of these products, already planned for offering in parts of Europe as they give investors more options to earn.
