Ethereum
Analysts Eye Possible Short Squeeze Ahead of Ethereum ETF Spot Deadline
Analysts at QCP Capital say the “resounding lack of interest” in the market and the approval of the Ethereum spot ETF could “easily” return ETH to its recent highs.
Although recent market data indicates a cautious atmosphere among investors regarding the potential approval of cash securities Ethereum exchange traded funds (AND F), the unexpected approval could trigger a short squeeze, which would allow ETH to reach its recent highs, analysts warn.
In a recent research report, analysts at QCP Capital said that the ETH/BTC pair has fallen to levels not seen since February 2021, suggesting that the market is “expecting a rejection and a non-event.” However, QCP Capital notes that Ethereum has demonstrated strong support at the $2,900 level, defending this price multiple times throughout the year.
In the current state of the market, the approval of the Ethereum ETH spot could come like a bolt from the blue, triggering a “short squeeze easily taking us back to recent highs,” QCP Capital said. Since January, Ethereum has reached $4,066, although it remains below its all-time high of $4,891 set in November 2021. Against this backdrop, the approval of an ETF could serve as a major catalyst for further momentum bullish, potentially bringing ETH back towards these levels.
However, so far there are no clear signals from the US Securities and Exchange Commission (SEC) suggesting an imminent approval of a spot ETH ETF. Eric Balchunas, analyst at Bloomberg said in a recent post that the SEC could consider Ethereum as a security in its decision-making process, indicating that the chances of approval are “slim to none.”
Nonetheless, David Han, an analyst at cryptocurrency exchange Coinbase, said the market “may be underestimating the timing and chances of potential approval,” adding that the second-largest cryptocurrency by market value “may still have the potential to surprise on the upside in the months to come.” come”. […].”
The SEC is expected to make a decision on VanEck’s application for an Ethereum spot ETF on May 23.