Speculation of spot ether ETF refuels crypto rally – Crypto News
Ether leads revived rally in cryptocurrencies on ETF hopes
SEC reportedly U-turns on possible approval of spot ether ETF
But can the latest rally be sustained?
Ether – the second most popular cryptocurrency – is having its best week since August 2021 amid renewed speculation that the US Securities and Exchange Commission (SEC) is about to approve the first spot ether Exchange Traded Fund (ETF). Based on the Ethereum platform, ether has enjoyed an equally strong year as its main rival, bitcoin, surging by around 65%.
However, the uptrend stalled in March when the euphoria around bitcoin’s ETF approval fizzled out and there was no post halving rally either to keep the bullish momentum going. The latest upswing in ether has yet to take prices above the highs of 2024, but this may only be the first leg should the reports of an imminent approval turn out to be accurate.
A U-turn that’s turning a lot of headsThe reports of a regulatory approval first emerged on Monday when the SEC asked exchanges to amend their filings for the application of spot ETFs. This is usually taken as a sign that the SEC is readying to give the green light, possibly as early as this week.
Only two weeks ago, the agency had indicated that an approval was not likely. The sudden U-turn suggests that the decision, if it comes, is politically motivated amid some speculation that the White House wants to be seen as being pro-crypto to boost President Biden’s chances of re-election.
Can ether reach a new record high?Nevertheless, the prospect of spot ETFs for ether soon trading alongside those of bitcoin has reenergized crypto bulls. Weekly gains currently stand at about 22%, taking the price briefly above $3,800 on Tuesday.
However, this is some distance from the 2024 high of $4,095 scaled in March and the positive momentum seems to be waning. The RSI has dipped slightly in the overbought region and the faster moving %K line of the stochastic oscillator is getting close to crossing below the slower moving %D line.
If the rally pauses for breath, or in the worst-case scenario, the SEC decides not to approve spot ETFs in the US, ether could plunge towards its 50-day moving average (MA) at $3,180, before testing its 200-day MA at $2,770.
![](https://www.xm.com/wp-content/uploads/2024/05/image-1716378673542.png)
But should the SEC not disappoint, ether could overtake its previous peak and aim for its all-time high of $4,868 from November 2021.
Doubts about institutional demandThere is a risk, however, that the rally may struggle to survive much beyond the actual decision on ‘buy the rumour, sell the news’ effect. Whilst bitcoin didn’t suffer the same fate, ether may not benefit from the same level of interest by institutional investors. This is something that has yet to be tested.
Moreover, fading expectations of Fed rate cuts and other central banks this year may also hold back gains in the short-to-medium term.
Even so, in the bigger picture, ether is likely to continue to be driven mainly by developments with bitcoin, and right now, the long-term prospects of both are looking up.Ultime news
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