In a recent development, the U.S. Securities and Exchange Commission (SEC) has opted to prolong its assessment of Fidelity’s application for a spot Ethereum ETF. This decision, conveyed through a letter to Fidelity dated January 18, 2024, marks a pivotal moment in the cryptocurrency landscape, prompting industry watchers to contemplate potential parallels with the journey of Bitcoin ETF approvals.
The application, initially submitted on November 17, 2023, and open for public comments since December 6, will now undergo an extended evaluation process, with the resolution expected around March 5, 2024. Notably, this 45-day extension has fueled speculation, with Bloomberg analyst James Seyffart suggesting that approval might materialize in May. BlackRock’s CEO, Larry Fink, expressing confidence in the value of a spot Ethereum ETF, added weight to the conversation, noting the significance of such a development shortly after the approval of the spot Bitcoin ETF.
While the approval of the spot Bitcoin ETF failed to trigger a notable surge in prices, Ethereum, on the other hand, might experience a more pronounced response to both the proposal submission and the eventual decision. The cryptocurrency, currently trading around $2,400, has witnessed a minor loss of less than 1% in the last 24 hours. Despite this apparent downtrend, Ethereum’s current value surpasses its worth from a year ago.
Analyzing the daily timeframe chart, it becomes evident that ETH did not reach its present price level over the past year. The ongoing bull trend, while displaying signs of weakening, remains evident, with the Relative Strength Index (RSI) indicating a bullish trend at press time by remaining above the neutral line.
The impact on Ethereum’s market trends is being closely monitored. Unlike Bitcoin, where the ETF approval had a minimal immediate effect on prices, Ethereum’s market may be more responsive to the news of the proposal submission and subsequent decision. As of the latest update, Ethereum (ETH) is trading at approximately $2,400, reflecting a marginal loss of less than 1% in the last 24 hours. Despite the current downtrend, Ethereum’s value remains higher than its position a year ago.
Analyzing the daily timeframe chart for ETH/USD, it becomes evident that the present price level was not reached over the past year. However, the ongoing bull trend shows signs of weakening, with the Relative Strength Index (RSI) remaining above the neutral line, indicating a prevailing bullish trend.
Examining the exchange flow of Ethereum, it is notable that the balance between inflow and outflow shifted around January 14. Since then, a consistent trend of more outflows than inflows has emerged. This suggests a significant amount of ETH is leaving exchanges, with fewer Ethereum assets available for sale recently. This dynamic in exchange flow could potentially impact the cryptocurrency’s market dynamics in the coming weeks.
Taking a closer look at Ethereum’s exchange flow, a recent examination by AMBCrypto reveals a noteworthy shift in the balance between inflow and outflow around January 14. Since then, a consistent trend has emerged, indicating more outflow than inflow. This suggests a substantial amount of ETH is leaving exchanges, while the incoming volume remains comparatively lower. Furthermore, this trend implies a reduction in the number of Ethereum assets available for sale in recent times.
As the cryptocurrency community awaits the SEC’s decision, the impact on Ethereum’s market dynamics and valuation remains a focal point of discussion. While the spot Bitcoin ETF approval did not lead to an immediate surge in prices, Ethereum’s unique circumstances and the increasing outflows from exchanges raise questions about how the market will react.
Potential investors and enthusiasts are advised to stay vigilant, as the SEC’s decision holds the potential to reshape Ethereum’s trajectory in the coming months. Whether the market will witness a surge in prices following approval or if the current trends in exchange flows will continue, only time will tell.
In the ever-evolving landscape of digital assets, regulatory decisions play a crucial role in shaping market sentiment. As Ethereum enthusiasts and investors eagerly await the outcome of the SEC’s review, the cryptocurrency market is poised for a period of heightened anticipation and speculation.
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