Looking to the Futures

Ether Prices Explode on ETF Rumors

May 22, 2024 Ryan Hinsen
The price of the second largest cryptocurrency surged over 20% this week on reports that progress is being made towards spot-ETF approvals.

The approval of spot-bitcoin ETFs helped the largest cryptocurrency climb 65% this year before pulling back. Ether saw its largest advance since November 2022 when it gained nearly 14% on Monday. The US Securities & Exchange Commission (SEC) reached out to the New York Stock Exchange and Cboe Global Markets to have them update their 19b-4 filings that proposed the rule changes to allow these new products. The regulator requested a universal comment, meaning they want all filings to be submitted using the same language. 

Issuers of the proposed products will need their S-1 registration statements signed off by the SEC next before making the products available. The approval or denial decision for the VanEck ether ETF is due May 23. Last Tuesday, Fidelity Investments updated its S-1 registration statement for its ether ETF. In it they promised to keep the ether it buys off programs that pay rewards for staking (maintaining the blockchain) and avoid derivatives. Staking in particular has been a hot debate with regulators if the rewards of staking make ether a security or not. 

On Monday, Bloomberg Intelligence ETF analyst Eric Balchunas mentioned his colleague James Seyffart increased the probability that a spot-ether ETF will get approved from 25% to 75% - this set off the ETF-approval speculation. This was a sharp change from the pessimism displayed by potential issuers who mentioned their talks with the SEC had not seemed to be going anywhere. 

Ether is the native token of the Ethereum blockchain, which has developed into the most used infrastructure in crypto. It is used for the most popular decentralized finance apps and services, creating and trading NFTs (nonfungible tokens), and much more. It is not without its rivals like Solana, though. 

Speculators will be hoping for another windfall similar to the one from the spot-bitcoin ETFs that attracted nearly $59 billion in assets since their launch in January; one of the most successful launches for a fund category ever.  

Technicals

Looking at the continuous ether futures (/ETH) we can see downtrend that had been in place since March has abruptly broken on this news. It is now above the near-, mid-, and long-term moving averages. The 14-day RSI is at 68% - nearly overbought levels. The next level of resistance is found at the previous high around 4100 and support is found between the 9-day and 50-day moving averages; 3200 – 3300. 

Ether May 2024 (/ETHK24) Chart

Ether May 2024 (/ETHK24) Technicals

Contract Specifications

Ether May 2024 (/ETHK24)

Ether May 2024 (/ETHK24) Specifications

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