- The cryptocurrency market is on the brink of a new era, with Ethereum (ETH) showing signs of an impending bull run.
- Last week, the SEC approved the first ETH ETFs, leading to a significant weekly increase for Ethereum.
- ETH saw a 27% increase over the week and a 2.34% rise in the last 24 hours, reaching intraday highs of $3,950.
Discover the latest developments in Ethereum’s market performance and what it means for the future of cryptocurrency.
SEC Approval of ETH ETFs: A Game Changer
The U.S. Securities and Exchange Commission (SEC) recently approved the first spot ETH ETFs, marking a pivotal moment for Ethereum and the broader cryptocurrency market. This unexpected approval has led to a surge in Ethereum’s value, with the cryptocurrency experiencing a 27% increase over the past week. As of now, ETH is trading at $3,941, up 2.34% in the last 24 hours.
Impact on Derivatives Market
The derivatives market has shown a significant shift in sentiment towards Ethereum. Open interest and funding rates have provided valuable insights into trader sentiment, which has turned overwhelmingly positive following the SEC’s approval. Within just three days, ETH perpetual futures funding rates soared from their lowest point in over a year to a multi-month high. Open interest also reached an all-time high of $11 billion, indicating substantial capital inflows into the market.
Broader Market Sentiment
The ETH Cumulative Volume Delta (CVD) reveals that the recent surge in Ethereum has been broad-based, with substantial net buying in both U.S. and offshore spot markets since May 21. This suggests a wider global optimistic sentiment towards Ethereum. Notably, offshore exchanges had been registering net selling until this recent turnaround.
Market Depth and Liquidity
Market depth, which measures the market’s ability to sustain large orders without impacting the asset’s price, is another crucial indicator. According to Kaiko, ETH’s market depth on centralized exchanges (CEXes) is approximately $226 million, still 42% below its pre-FTX average levels. Only 40% of this market depth is concentrated on U.S. exchanges, compared to around 50% in early 2023. This indicates that while there is significant liquidity, it is not yet at pre-crisis levels.
Conclusion
The SEC’s approval of ETH ETFs has removed some of the regulatory uncertainty that has plagued Ethereum over the past year. This development is a positive sign for ETH, even if immediate inflows do not meet expectations. The broader market sentiment, increased open interest, and improved market depth all point towards a potentially bullish future for Ethereum. Investors and traders should keep a close eye on these indicators as they navigate the evolving landscape of the cryptocurrency market.
