On the early morning of May 21, the market experienced a reversal. Reports indicated that the U.S. Securities and Exchange Commission (SEC) had requested spot ETF applicants to submit revised 19b-4 filing documents. Meanwhile, Bloomberg analysts stated that the approval probability for a spot Ethereum ETF had increased from 25% to 75%. This positive news injected a strong boost into the sluggish crypto market, causing a surge in activity. Bitcoin broke through $71k, and Ethereum saw a rise of up to 22%, briefly surpassing $3,800. The altcoin market also experienced a rare upward trend.

According to Coinglass data, the total liquidation amount in the past 24 hours reached $380 million, with $294 million in short liquidations. Specifically, BTC saw $86.7 million in short liquidations, while ETH had $104 million in short liquidations, marking the highest liquidation since February 28.

On-chain Data Indicators

According to Nansen data, the implied volatility curve for Ethereum has flattened, indicating a decrease in market expectations for future price fluctuations. Additionally, the 25 Delta risk reversal reached an annual high of over 18%, suggesting that investors are inclined to buy call options, showing greater confidence in ETH price increases.

Joseph Schrarizzi, founder of Stable Open Dollar, also pointed out on the evening of May 20 that Ethereum's market cap increased by an amount equivalent to half of its competitor Solana's market cap within just three minutes.

According to a report by Presto Research analysts, on May 24, traders heavily bought $4,000 ETH call options, driving up the price. Currently, the open interest value of Ethereum options stands at $3 billion, set to expire at the end of May and June.

At the same time, the number of call options (opened by optimistic traders who believe asset prices will rise) is nearly 2:1 compared to put options.

VC Insights | Overview of ETH ETF Approval Expectations

As the #2 cryptocurrency in the crypto world, Ethereum has a stable and strong user base and underlying ecosystem support. Its Layer 2 and Restaking are popular tracks closely linked to it. Currently, companies such as Fidelity, BlackRock, VanEck, Bitwise, and Ark Invest are making final preparations.

Fidelity has submitted a revised S-1 application to the SEC for its spot Ethereum exchange-traded fund (ETF).

Currently, the U.S. Depository Trust & Clearing Corporation (DTCC) website has listed VanEck's spot Ethereum ETF "VANECK ETHEREUM TR SHS" (ticker: ETHV), with the Create/Redeem section marked as N.

The DTCC website frequently lists securities that meet trading and settlement qualifications within its system, including ETFs that have completed specific registration or compliance processes. However, this does not indicate that it will receive SEC approval.

It is reported that VanEck applied for a spot Ethereum ETF in September 2023. Many other industry giants, including BlackRock, ARK Invest, and Fidelity, have followed suit. Among them, the application resolution deadline for VanEck is May 23, while ARK Invest/21Shares has a deadline of May 24.

According to LBank market observations, Bloomberg senior analyst Eric Balchunas stated on the X platform that rumors suggest the SEC hopes to submit the revised 19b-4 filing for the spot Ethereum ETF by 10 AM local time tomorrow (based on the large volume of comments received today), with the earliest possible approval on Wednesday.

Geoff Kendrick, head of foreign exchange research and digital asset research at Standard Chartered Bank, stated that if the spot Ethereum ETF is approved, it is expected that between 2.39 million to 9.15 million ETH will flow in during the initial 12 months, equivalent to approximately $15 billion to $45 billion.

Notable bull and Bitwise Chief Investment Officer Matt Hougan commented on the upcoming spot Ethereum ETF resolution, stating that regardless of whether the ETF is approved, new highs are inevitable.

At the same time, the market seems less enthusiastic about this rumor or bullish sentiment. Jeff Owens, co-founder of Layer-1 blockchain Haven1, agreed, stating, "The unexpected fluctuations in Ethereum's price indicate that the risk of the SEC approving the spot ETH ETF is quite high."

ETH Price Analysis & Prediction

From the current ETH trend, ETH has emerged from the market downtrend and achieved a rise of up to 20%.

If the spot Ethereum ETF is approved, it could bring in billions of traditional funds. Consider that ETH's market cap is approximately 28% of BTC's market cap, meaning that a 30% inflow of funds into BTC could have a 100% impact on ETH.

As of the time of writing, ETH is trading at approximately $3,791, having increased by 31.5% over the past 7 days.

As the deadline approaches, the volatility of major cryptocurrencies has significantly increased. If the SEC rejects the application, a short-term sell-off of ETH may occur. LBank reminds you to be aware of trading risks to prevent significant trading adjustments.