Is This MEV Trading Firm Responsible for Ethereum Falling Below $3,800?

ethereum is strong, trending up and outperforming the world's most valuable currency, bitcoin. Earlier today, ethereum prices surpassed $3,900 before retracing sharply below $3,800 and recovering to spot rates.

In an attempt to explain the unexpectedly high volatility, especially with prices falling rapidly from $3,900 to below $3,800, some analysts claim that a large sell order by a Maximum Extractable Value (MEV) trading firm, Symbolic Capital Partners could be responsible.

ethereum is volatile above $3800: possible explanation

In a post on x, a crypto journalist, citing another source, x.com/WuBlockchain/status/1793645325833683166″ target=”_blank” rel=”noopener nofollow”>saying Symbolic Capital Partners offloaded 6,968 eth, worth over $27 million, with an average selling price of $3,930 in one minute. Notably, one of these transactions involved the sale of 3,497 eth simultaneously, with a x.com/leovu021/status/1793652584089317509″ target=”_blank” rel=”noopener nofollow”>“high bribe rate” of 90 eth.

While the exact reason behind this massive spill is still unclear, its action appears to have impacted prices, causing volatility.

At spot exchange rates, ethereum is up 30% from the May 2024 lows. Technically, the uptrend remains as long as prices trade above $3,700. On May 20, eth prices surpassed $3,300 and $3,700. These were two key resistance levels that now have support.

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As long as prices break above $3,700, the bulls could have a basis for another rise, taking them to March highs of around $4,100.

Even with high eth volatility, the overall sentiment remains positive. An analyst at x x.com/AxelAdlerJr/status/1793644059481055687″ target=”_blank” rel=”noopener nofollow”>grades That over the past three weeks, open interest in ethereum futures on multiple exchanges, such as Binance, OKX, and even Bybit, rose to over $4.6 billion.

Open interest is a metric that shows the number of leveraged positions open, long or short. When the number increases, traders are confident in the currency's prospects.

Spot eth ETF fueling interest

So far, the enthusiasm for ethereum is related to the positive progress in the approval of spot exchange-traded funds (ETFs). As of this writing, the United States Securities and Exchange Commission (SEC) has been actively communicating with potential issuers. Changes have been requested, particularly regarding eth staking.

Some analysts believe that the lack of staking capabilities for ethereum spot ETFs is a positive overall. In a publication in x, the analyst x.com/VivekVentures/status/1793117448792654185″ target=”_blank” rel=”noopener nofollow”>argument that if ethereum ETF spot issuers are allowed to stake, returns will fall, reducing returns for individual stakers. This, in turn, will make individual bets less attractive, which will affect the decentralization of the network.

Featured image from Canva, TradingView chart