How the Ethereum price reacts to the ETF approval in the USA

The approval of Ethereum spot ETFs has finally been successful in the USA. So far, the Ethereum price has reacted very cautiously to the bullish event. Many analysts expect a parabolic price development in the foreseeable future. However, one expert warns against speculation.

How the Ethereum price reacts to the ETF approval in the USA

The US Securities and Exchange Commission approved the long-awaited Ethereum spot ETFs in the US a few hours ago . This allows the second largest cryptocurrency to emulate at least some of the success that Bitcoin approved back in January.

Many investors hope that Ethereum can follow suit and will now become the target of many investments. In the US, institutional investors’ interest in cryptocurrencies is high. Since the launch of Bitcoin spot ETFs four months ago, they have generated net inflows of around 13 billion US dollars.

As a report shows, the investors include many large financial companies – in addition to the powerful US banks JPMorgan and Wells Fargo, also the Swiss major bank UBS.

At the time of writing, Ethereum had not yet benefited from the approval, which was granted late on May 23. The cryptocurrency is down 5.70 percent in the daily trend and is trading at $3,710.

But why has ETH not been able to make any profits after the ETF approval? One possible reason is that the euphoria surrounding the approval was already priced in beforehand.

Just two days before the approval, many experts were suddenly euphoric and changed their previously critical statements. As a result, ETH gained up to 30 percent – gains that are partially disappearing due to the current correction.

Analysts expect price rally for Ethereum

Although ETH has not yet shown a clear reaction to the SEC’s politically significant decision, many analysts still expect a price rally from Ethereum in the near future.

Although the SEC has already given the green light, it is not yet known when the ETFs will be publicly traded. According to experts, the market launch could take weeks or even months.

As soon as the funds enter the market, the price rally for Ethereum could start. Large amounts of institutional money could flow into the cryptocurrency and thus lead to rising prices.

Well-known trader and price analyst Ali Martinez expects Ethereum to rise to at least $5,000 – based on the current price, this corresponds to an increase of around 35 percent.

According to Martinez, the current key resistance for ETH that needs to be overcome first is between $3,940 and $4,054. ETH set its current all-time high on November 16, 2021, at $4,891.

How high the profits for Ethereum actually turn out to be depends heavily on the success of the ETFs. So far, the experts’ forecasts differ greatly from one another. Critics do not believe that Ethereum can achieve the same level of success as market leader Bitcoin .

Following the SEC approval, price analyst Emperor predicted the imminent start of an altcoin season.

“The Ethereum price action has gone ballistic and may continue to go ballistic even after ETF approval. The price action of altcoins is highly dependent on ETH,” he explained.

In general, he advises against short trading in the foreseeable future. Betting on losses in cryptocurrencies is currently too risky. In fact, the entire crypto market lost 3.55 percent over the last 24 hours.

Is Ether threatened by massive sell-offs?

According to Martinez, a positive price development for Ether is not absolutely certain. He can already see large amounts of coins that are currently being transferred to crypto exchanges with the aim of selling them.

“The increasing ETH deposits on crypto exchanges indicate the possibility of a sell-off or huge profit-taking,” Martinez wrote.

Even Jeffrey Wilcke, a co-founder of Ethereum, apparently transferred 10,000 ETH to the crypto exchange Kraken to sell them there. At the time of writing, this amount corresponds to the equivalent of around 37 million US dollars.

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As data from Glassnode shows, Wilcke is not the only major investor with this plan. Around 240,000 ETH flowed to crypto exchanges over the past two weeks – significantly more than usual recently. Martinez therefore urges particular caution when speculating with ETH.