Chart of the day - Ethereum (23.05.2024)

12:02 pm 23 May 2024

Ethereum is gaining 0.70% today, returning above $3,800. This week could be crucial for the cryptocurrency market due to several significant catalysts.

One of them was yesterday's Nvidia results, which not only met expectations but exceeded them. This was somewhat necessary to continue the bull market in the AI sector and broader tech related companies. The importance of Nvidia's report for the markets was confirmed by the reaction in the indices following the publication, which set new all-time highs. In the cryptocurrency market, we also observed a rebound, though it was quite moderate.

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Another catalyst that could be a decisive factor shaping market sentiment in the coming weeks is the SEC's final decision on spot ETFs for Ethereum. Below are some important points from recent days:

  • BlackRock files updated 19b-4 form for its spot Ethereum ETF.
  • The SEC has informed exchanges that it is leaning towards approving spot Ethereum ETFs and is expediting the review process, with potential approval by Thursday.  
  • Standard Chartered is 80%-90% confident in Ethereum ETF approval this week, predicting ETH price targets of $8,000 by 2024 and $14,000 by 2025.  
  • Grayscale has removed staking language from its spot Ethereum ETF filing, similar to recent amendments by other issuers like Fidelity.

The market's reaction to an Ethereum ETF could be entirely different from the one at the beginning of January following the acceptance of a Bitcoin ETF. In the case of Bitcoin, the decision itself was the number one topic in the media, and fruitful and widespread discussions with the SEC made the likelihood of acceptance high. For Ethereum, the probability was only about 20% just a few days ago, and the market simply did not believe in acceptance. However, everything changed in recent days along with the SEC's attitude. Despite this, the price of Ethereum is still over 20% below its historical highs, and the recent surge was merely a reaction after significant declines observed in April and May. Therefore, the acceptance of Ethereum ETFs does not necessarily have to be another "sell the news" event, as it was with Bitcoin. However, the risk of rejection still exists, and one thing that is certain is market volatility in the coming days.

Source: xStation 5

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