Digital asset trading company QCP Capital stated in a post yesterday that there are two main reasons for the sudden rebound of Ethereum in the market downturn on the 18th, and it predicts that ETH may approach the historical high of $4,800 after the listing of Ethereum spot ETF.
(Previous summary:
Good news! Consensys claims that the SEC recognizes “ETH is not a security”, and the Ethereum spot ETF will pass in July?
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(Supplemental background:
10X Research sees four obstacles to the market: Ethereum leverage positions are still long, a large number of altcoins are unlocked, and net fund outflows.
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Table of Contents:
Ethereum spot ETF may drive ETH price close to historical high of $4,800
SEC to end investigation into Ethereum
Ethereum spot ETF issuer to respond to SEC comments before Friday
The U.S. Securities and Exchange Commission (SEC) approved the 19b-4 rule change documents for eight Ethereum spot ETFs on May 24, taking an important step towards the listing of Ethereum spot ETFs. The market is closely watching when the SEC will approve the S-1 registration statement and officially list it.
However, the market is currently experiencing a downturn. After the SEC approved the 19b-4 document, the price of ETH reached a high of $3,977, but then continued to decline. On the 18th of this month, it even dropped to $3,355, a decrease of 13.7%.
However, there has been a significant rebound in the past two days, and it has pulled back to $3,545 before the deadline. It is much stronger than the rise of Bitcoin and has fully recovered from the previous week’s decline.
ETH price. Source: Binance
Against this background, digital asset trading company QCP Capital stated in a post yesterday that the ETH price rose sharply from the low of $3,400 on the 18th, implying that the volatility has significantly increased to 65% in the short term. There are two main factors behind this strong bullish sentiment:
The U.S. Securities and Exchange Commission (SEC) decided to end the investigation into Ethereum 2.0, ruling out the accusation of treating ETH sales as securities transactions.
According to sources, potential issuers of Ethereum ETF are actively responding to the comments raised by the SEC and plan to submit a response this week.
QCP Capital pointed out that the options market currently shows optimistic sentiment, and it has observed active trading of call options with different expiration dates. In addition, QCP Capital also predicted that after the listing of Ethereum spot ETF, the ETH price is expected to approach the historical high of $4,800.
Implied Volatility (IV) is the expected volatility derived from option prices. It reflects the market’s expectation of the degree of price volatility of the underlying asset in the future. Specifically, implied volatility represents investors’ views on the magnitude of price changes in the asset over a certain period of time. When implied volatility rises, it usually means that the market expects greater volatility in the underlying asset’s price. Conversely, when implied volatility decreases, it means that the market expects a decrease in price volatility.
According to previous reports by Dong Qu, Consensys, the parent company of MetaMask, received a Wells notice from the SEC in April, stating that the SEC considers Consensys an unregistered broker-dealer and intends to take enforcement action against MetaMask wallet for violating securities laws.
In order to defend the Ethereum ecosystem, Consensys also filed a complaint against the SEC in that month, accusing the SEC of intending to classify Ethereum as a security, which is an “illegal seizure” of Ethereum. It requested the court to declare that Ethereum is not a security and argued that any investigation against ConSenSys based on the premise that Ethereum is a security would violate administrative procedures.
After two months of silence, Consensys announced on Twitter yesterday that the SEC will end the investigation into Ethereum and will not accuse the sale of Ethereum as securities transactions.
Meanwhile, according to The Block, two sources revealed that the issuers of Ethereum spot ETF received comments from the SEC about the S-1 document last week and plan to submit a response before this Friday. A source from one issuer stated that the latest round of comments is “reasonable” and expects to be approved soon, while another source from another issuer described the comments as “relaxed.”
Earlier, Eric Balchunas, an analyst at Bloomberg who has been closely following ETF developments, predicted on the 15th that the launch date of Ethereum spot ETF would be brought forward to July 2:
With many institutions and analysts releasing news about the progress of SEC’s approval of Ethereum spot ETF, we are getting closer and closer to the listing of Ethereum spot ETF. However, whether the cryptocurrency market can get rid of the continued decline and low sentiment through the listing of Ethereum spot ETF still needs continued attention.
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