Ethereum Volatility Narrative, Spot ETF and Altcoin Beta Hype Back ETH Rally
Ether (ETH) price broke resistance at $2,400 for the first time since May 2022, as traders turned their attention to the Ethereum exchange-traded fund (ETF) space after the approval of the Bitcoin ETF.
Ether's price has risen sharply from its opening price of $2,343 on January 10th, up more than 7.8% in the last 24 hours and more than 85% in the last 12 months to $2,444 year-to-date.
ETH was the only volatile coin among the top 10 cryptocurrencies by market capitalization in the minutes after the SEC's inaccurate tweet on spot BTC ETF approvals caused significant price volatility in the price of Bitcoin (BTC).
The last time Ether traded above $2,400 was on May 3, 2022, when it reached a high of $2,529, before dropping to a low of under $1,000 on July 18, 2022, following the expansion of the Terra ecosystem.
Layer 2 networks such as Mantle MNT and Optimum (OP) received 9% and 15% respectively. These networks are built on top of the Ethereum network but operate as independent blockchains, allowing users to transact cheaper and faster than the underlying blockchain.
Crypto analysts at X suggest that market participants are gearing up for the approval of an Ethereum ETF, which would give professional investors in the US direct exposure to ETH.
“Currently the momentum is skewed around Bitcoin and ETF approvals, but Ethereum may get a spot ETF,” said CEO and founder MN Trading Michael van de Pop in a post on X.
Data from Coinglass shows that short-position liquidity for Ethereum has reached $31.7 million in the past 24 hours, a number that is increasing at the time of writing.
Meanwhile, the SEC is expected to make its ruling on Bitcoin ETF applications in Jan. 10.
Market participants are confident that the approval will happen soon, especially after the Cboe announced on January 10 the list of approved securities from several asset managers.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
