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QCP Capital analysts say the “flat lack of interest” in the market and the approval of the ethereum spot ETF could “easily” push eth to recent highs.
While recent market data indicates a cautious atmosphere among investors regarding the possible approval of ethereum exchange-traded funds (ETFs), the unexpected approval could trigger a brief squeeze resulting in eth hitting its recent highs, analysts warn.
In a recent research report, analysts at QCP Capital said that the eth/btc pair has fallen to levels not seen since February 2021, suggesting that the market is “anticipating a rejection and a non-event.” However, QCP Capital notes that ethereum has demonstrated strong support at the $2,900 level, defending this price several times throughout the year.
With the current state of the market, the approval of eth ethereum spot could come like a bolt from the blue, triggering a “short squeeze that easily takes us back to recent highs,” says QCP Capital. Since January, ethereum has risen as high as $4,066, although it remains below its all-time high of $4,891 set in November 2021. Given this backdrop, the approval of an ETF could serve as a major catalyst for renewed bullish momentum, leading which could cause eth to return to these levels.
However, so far, there are no clear signs from the US Securities and Exchange Commission (SEC) suggesting an imminent approval of a spot eth ETF. Bloomberg analyst Eric Balchunas said in a recent
However, David Han, an analyst at crypto exchange Coinbase, says the market “may be underestimating the timing and probabilities of a potential approval,” adding that the second-largest cryptocurrency by market value “may still have the potential to surprise on the upside in the coming months (…).”
The SEC is expected to make a decision on VanEck's application for an ethereum spot ETF on May 23.
