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The Ether (ETH) price exploded higher on Monday as traders bet that the SEC will approve Ethereum ETFs as soon as this week following the emergence of rumors of a major SEC u-turn.
ETH was last trading with gains of more than 10% in the $3,400 region.
Bloomberg ETF analyst Eric Balchunas tweeted on X that he and fellow analyst James Seyffart had increased their odds of approval to 75% after hearing chatter that the SEC could be doing a “180”.
Update: @JSeyff and I are increasing our odds of spot Ether ETF approval to 75% (up from 25%), hearing chatter this afternoon that SEC could be doing a 180 on this (increasingly political issue), so now everyone scrambling (like us everyone else assumed they'd be denied). See… https://t.co/gcxgYHz3om
— Eric Balchunas (@EricBalchunas) May 20, 2024
With deadlines to approve, deny or extend some ETF applications coming as soon as Thursday, approval could come this week.
Prior to the latest rumors of an SEC u-turn, most had expected that Ethereum ETF rejections were coming.
Indeed, the SEC has reportedly been looking to classify Ether as a security in recent months.
Will SEC Approve Ethereum ETFs?
Bloomberg analysts Balchunas and Seyffart have a great track record of predicting crypto ETF approvals.
They vocally championed the idea that spot Bitcoin ETF approvals were coming in 2023, despite market pessimism at the time.
Its no wonder then that a major repricing is currently underway in the Ether market. Investors are aggressive upping their bets that, yes, the SEC will approve spot Ethereum ETFs.
And that is pushing the price substantially higher as a result. Why?
Because the approval of Ethereum ETFs will give institutional investors much easier access to gain exposure to Ether.
Just as happened with Bitcoin, this is likely to substantially boost the Ether price over the long term.
Where Next for ETH?
The latest pump higher in the Ether price has seen it snap out of a downward trend channel that had been in play since mid-March.
ETH has also been able to clear its major moving averages and recently found strong support at its 2024 uptrend.
Technical analysis thus suggests the near-term outlook for the Ether price is bullish.
The next upside target is the April highs above $3,700. Beyond that, a near-term test of March highs above $4,000 is likely.
The approval of Ether ETFs, if it happens, arrives at a time of already improving market sentiment.
Recently released US jobs and CPI inflation data for April reduced fears about the economy running too hot.
It thus boosted hopes that the Fed will still be able to cut interest rates multiple times this year.
Spot Bitcoin ETF inflows also picked up last week, amid over 500 asset managers revealing ETF exposure via 13F filings.
The Bitcoin ETFs bought more than 14,000 BTC this week. The miners only mined 3,150. Think about that. Wow. It’s a HUGE and growing delta. Technically, Bitcoin is coiling on nearly every indicator. $70,000 is imminent. We are going up, folks. Hold on to your hats and sunglasses.
— Mike Alfred (@mikealfred) May 18, 2024
Traders were already talking about a retest of record highs for Bitcoin. That talk is only likely to now grow with Ethereum ETFs likely coming this week.
Nvidia earnings and FOMC minutes could also provide catalysts for further upside movement.
The Ether price had been lagging BTC prior to Monday’s pump.
But a continued improvement in market sentiment plus Ethereum ETFs could be just the combination required to vault the Ether price back to its record highs near $4,900.
