- Ethereum sees a 3% price jump as SEC hints at approving an Ethereum Futures ETF.
- A $450 million influx into ETH Derivatives markets sparks excitement and anticipation.
- Bullish sentiment extends to the spot markets, with active orders and high demand.
On September 28, Ethereum (ETH) experienced a rapid 3% surge, soaring to $1,650. This surge was prompted by a Twitter hint from Bloomberg Analyst Eric Balchunas, suggesting that the SEC might greenlight an Ethereum Futures ETF that Friday. The question on everyone’s mind: How will this development affect Ethereum’s spot market prices?
News of an impending Ethereum ETF approval has led to a substantial influx of capital into ETH Derivatives markets. The burning question remains: How high can Ethereum’s price soar if these market projections hold true?
Ethereum Open Interest Reaches a 40-Day Peak Following $450 Million Inflows
After Eric Balchunas, a Bloomberg ETF analyst, hinted at a potential Futures ETF approval via Twitter, Ethereum’s price surged by 3% on September 28. The news received an enthusiastic response from Ethereum derivatives traders.
As illustrated below, aggregate ETH Open Interest amounted to $4.16 billion on September 27. Within just 24 hours of the news, that figure swelled to $4.51 billion.
In essence, this translates to investors pouring $450 million into the ETH Futures market in anticipation of the US Securities and Exchange Commission (SEC) giving the green light to an ETH ETF on Friday.
Open Interest represents the total of all outstanding derivatives contracts for an asset across various Futures trading platforms. An upswing in Open Interest serves as a bullish signal, indicating an influx of new market participants and fresh capital inflows.
If the SEC indeed approves the ETH Futures ETF as expected, Ethereum’s Open Interest could see further growth in the weeks to come. However, for this to translate into a corresponding price rally, there must be a surge in spot market demand for ETH.
Bullish Sentiments Spreading to the Spot Markets
The recent news has unquestionably bolstered confidence in the Ethereum derivatives markets. Nonetheless, on-chain data extracted from 21 crypto exchanges reveals that investors have also been amassing orders in the spot markets.
As depicted below, bullish investors have placed active orders to purchase 500,000 ETH. This figure significantly eclipses the 433,670 ETH currently available for sale.
The Exchange On-chain Market Depth chart illustrates the volume of active ETH spot orders distributed across recognized crypto exchanges.
As indicated above, market demand for Ethereum has outpaced supply by more than 66,330 ETH. This implies that the rumors of Futures ETF approval have also lifted the spirits of retail market participants.
In summary, if Eric Balchunas’ speculation regarding ETH approval holds true, Ethereum’s price could witness a substantial surge.
ETH Price Prediction: Potential Rally Towards $2,500
Based on the aforementioned key data points, ETH’s price could potentially reclaim $2,500 if the ETF approval triggers the anticipated reaction in the spot market.
Supporting this bullish prediction is the Global In/Out of Money Around Price (GIOM) data, which displays the entry price distribution of current ETH holders.
This data reveals that if ETH successfully clears the $1,850 resistance level, the bulls might ride the wave towards $2,500. As shown below, 6.88 million addresses acquired 8.38 million ETH coins at an average price of $1,850. If they decide to book profits early, this could create a significant resistance level.
However, if speculators in the derivatives market intensify their buying pressure, the Ethereum price rally could inch closer to $2,500.
Conversely, the bears could invalidate this optimistic projection if Ethereum’s price dips below $1,500. Nevertheless, as depicted above, 3.28 million addresses purchased 6.69 million ETH at a minimum price of $1,587.
As long as bullish sentiment continues to dominate, these holders are likely to prevent a bearish downturn. However, a failure to maintain this support level could potentially open the door to a reversal below $1,500.
Disclaimer: Please note that the viewpoints and perspectives expressed by the author, as well as any individuals referenced in this article, are intended solely for informational purposes. They should not be construed as financial or investment advice. It’s important to acknowledge that investing in or trading cryptoassets carries inherent financial risks.