CryptoQuant warns of Ethereum price correction, volatility if ETF approvals waver CryptoQuant warns of Ethereum price correction, volatility if ETF approvals waver
Approval delays and high exchange inflows could both impact ETHs price.
2 min read
Updated: May. 23, 2024 at 12:46 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
On-chain analytics firm CryptoQuant warned that ETH prices could fluctuate if pending spot Ethereum ETFs encounter uncertainties.
It warned that ETH could undergo a “significant price correction” if the SEC denies ETH ETF applications or delays the approval process.
Furthermore, high exchange flows could produce ETH price volatility in the coming days. Amid rumors of pending spot ETH ETF approvals, exchange flows reached 62,000 ETH, the highest since March.
Upward price pressure
Despite possible reductions, ETH prices have risen over several days following rumors that the SEC will approve spot ETFs connected to the digital asset.
Ethereum was trading at $3,735 as of press time on May 22, up approximately 21% over 24 hours, based on CryptoSlate data.
CryptoQuant said traders produced upward price pressure by aggressively opening long positions in the future market in expectations of higher prices, driving ETH open interest from 2.8 to 3.2 million ETH, the highest since January 2023.
The activity resulted in a short squeeze and cascading short liquidations.
Permanent ETH holders, or accounts that hold but do not sell ETH, additionally produced upward price pressure by purchasing a large amount of ETH. Permanent holders bought more than 100,000 ETH in one day, the highest daily amount since September 2023.
Buy orders dominate the ETH perpetual futures market with a taker buy/sell ratio above one, putting further pressure on the market.
ETH short position liquidations reached 9,300 ETH, marking the highest hourly volume in 2024 and causing a short squeeze in future markets.
Applications pending
The SEC must decide on VanEck’s spot ETH ETF proposal on May 23 but may decide on similar applications simultaneously.
The approval process is still underway. On May 21, Cboe filed 19b-4 rule changes on behalf of five ETH ETF issuers. Nasdaq has also amended 19b-4 filings for BlackRock, while NYSE Arca has filed updates for Grayscale’s Ethereum Mini Trust and Bitwise‘s application.
FOX Business reporter Eleanor Terrett stated that the SEC and issuers are now entering conversations around S-1 registration statements. Bloomberg ETF analyst James Seyffart believes that funds may not launch for weeks or months after initial approvals.
Ethereum Market Data
At the time of press 12:46 am UTC on May. 23, 2024, Ethereum is ranked #2 by market cap and the price is down 1.59% over the past 24 hours. Ethereum has a market capitalization of $449.52 billion with a 24-hour trading volume of $25.24 billion. Learn more about Ethereum ›
Crypto Market Summary
At the time of press 12:46 am UTC on May. 23, 2024, the total crypto market is valued at at $2.57 trillion with a 24-hour volume of $99.86 billion. Bitcoin dominance is currently at 52.95%. Learn more about the crypto market ›
Mentioned in this article
Author 
Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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In this article
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
CryptoQuant
CryptoQuant is a South Korean firm specializing in providing cryptocurrency market analytics and on-chain data to investors and industry participants.
BlackRock
BlackRock, synonymous with global asset management, is an American multinational investment management corporation based in New York City.
Bitwise
Bitwise Asset Management pioneered the first cryptocurrency index fund and is the leading provider of rules-based exposure to the cryptoasset space..
Grayscale Investments
Established in 2013 by Digital Currency Group, Grayscale Investments is a trusted authority on digital currency investing and cryptocurrency asset management.
James Seyffart is a well-regarded analyst at Bloomberg Intelligence, specializing in Exchange-Traded Funds (ETFs) and the broader fund industry.
