Experts at QCP Capital have observed a significant lack of interest in the market, but they believe that the approval of a spot Ethereum ETF could lead to a surge in the price of ETH, pushing it back to recent highs.
Despite the cautious sentiment among investors regarding the possibility of spot Ethereum exchange-traded funds (ETFs) being approved, analysts warn that an unexpected approval could trigger a short squeeze, causing ETH to reach its recent peak.
According to a recent report by QCP Capital, the ETH/BTC pair has dropped to levels last seen in February 2021, indicating that the market is anticipating a rejection and a non-event. However, Ethereum has shown strong support at the $2,900 mark, defending this price level multiple times this year.
Given the current state of the market, QCP Capital believes that the approval of a spot Ethereum ETF could be a game-changer, leading to a short squeeze that could easily drive ETH back to recent highs. Although Ethereum has reached highs of $4,066 since January, it is still below its all-time high of $4,891 in November 2021. With this in mind, the approval of an ETF could act as a significant catalyst for a bullish trend, potentially pushing ETH back towards these levels.
Despite the uncertainty surrounding the approval of a spot ETH ETF by the U.S. Securities and Exchange Commission (SEC), some experts remain optimistic. While Bloomberg analyst Eric Balchunas suggests that the chances of approval are slim, David Han from Coinbase believes that the market may not be fully appreciating the timing and likelihood of approval. He suggests that Ethereum could surprise investors with a positive move in the coming months.
The SEC is expected to make a decision on VanEck’s application for a spot Ethereum ETF on May 23. In the meantime, the battle for Ethereum ETFs continues to evolve, with ARK and 21Shares recently removing the staking feature from their plans.