The cryptocurrency market witnessed a puzzling development on Thursday as the price of Ethereum (ETH) took a dip, even after the Securities and Exchange Commission (SEC) Chair Gary Gensler hinted at the potential approval of spot ETH ETFs in the coming months.
According to reports, Gensler informed Senator Bill Hagerty that the SEC is likely to greenlight spot ETH ETF S-1 filings “throughout the summer.” This announcement followed the SEC’s approval of issuers’ 19b-4 filings on May 23, a crucial step towards the launch of spot ETH ETFs.
Despite the optimistic news, the Ethereum price experienced a decline of nearly 5%, reflecting mixed sentiment among derivatives traders. While some market participants viewed the potential ETF approval as a bullish signal, others exercised caution, leading to a temporary bearish outlook.
Interestingly, data from cryptocurrency analytics platforms revealed that ETH has seen substantial net outflows from exchanges in recent weeks, often interpreted as a bullish indicator. However, technical analysis suggested that the current bearish sentiment surrounding Ethereum might be short-lived.
While options traders have exercised caution, as evidenced by a decline in options volume and a futures long/short ratio below 1, the put/call ratio (PCR) on Deribit indicated strong bullish sentiment among traders.
Analysts anticipate a potential reversal for Ethereum in the coming days, with the price expected to stabilize around the $3,730 to $3,900 range. The launch of spot ETH ETFs is anticipated to propel the largest altcoin to new all-time highs above $4,878, assuming the $3,300 support level holds.
As the market continues to digest the latest developments, the mixed sentiment among derivatives traders highlights the complexity of the cryptocurrency market and the various factors that influence price movements.
