Analysts consider possible short squeeze ahead of spot Ethereum ETF deadline

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As an experienced analyst, I have closely watched the cryptocurrency market, particularly Ethereum (ETH), over the past year. The current market sentiment towards the potential approval of spot Ethereum exchange-traded funds (ETFs) is cautious, with investors anticipating a rejection and a non-event. However, I believe that an unexpected approval could trigger a significant short squeeze, pushing ETH back to its recent highs or even beyond.

According to analysts at QCP Capital, the apathy prevailing in the market and the impending approval of a spot Ethereum ETF have the potential to significantly boost Ethereum prices back up to their previous peaks.

Investor caution is evident in the current market data surrounding the possibility of Ethereum spot Exchange-Traded Funds (ETFs) being approved. However, an unexpected green light from regulators could spark a short squeeze and propel ETH back up to its previous peaks, according to analysts’ warnings.

As a researcher studying the cryptocurrency market, I’ve come across an intriguing observation from the team at QCP Capital in their latest report. They mention that the ETH/BTC pair has reached prices not seen since February 2021, implying a potential rejection and insignificant outcome for Ethereum in the market’s perspective. However, it is essential to note that Ethereum has shown resilience at the $2,900 support level throughout the year, defending this price point on multiple occasions.

As a researcher studying the cryptocurrency market, I’ve noticed that Ethereum (ETH) has been showing signs of recovery since January, reaching a high of $4,066. However, it is still below its all-time high of $4,891 set in November 2021. The current market conditions could be ripe for an unexpected event – the approval of a spot Ethereum ETF. If this were to happen, I believe it would act as a significant catalyst, sparking renewed bullish sentiment among investors and potentially pushing ETH back toward its previous highs. In other words, the approval of an ETF could serve as a major surprise factor that propels Ethereum prices back up.

Up to this point, there hasn’t been any definitive indication from the U.S. Securities and Exchange Commission (SEC) regarding an imminent approval for a spot Ethereum exchange-traded fund (ETF). Bloomberg analyst Eric Balchunas expressed in a recent blog post that the SEC could be viewing Ethereum as a security during their deliberations, implying that the likelihood of approval is quite low.

Despite David Han’s perspective as an analyst at Coinbase, there might be an underestimation among the market regarding the possibility and timing of approval for the second-largest cryptocurrency by market value. This cryptocurrency could potentially bring about unexpected gains in the upcoming months.

The SEC is expected to make a decision on VanEck’s application for a spot Ethereum ETF on May 23.

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2024-05-20 14:52