Analysts at QCP Capital say a “resounding lack of interest” in the market and approval of an Ethereum spot ETF could “easily” return ETH to its recent highs.
While recent market data suggests a cautious atmosphere among investors regarding the potential approval of exchange-traded funds (ETFs), the unexpected approval could trigger a short squeeze that takes ETH to its recent highs, analysts warn.
In a recent research report, analysts at QCP Capital said that the ETH/BTC pair fell to levels not seen since February 2021, indicating that the market is “expecting rejection and a non-event.” However, QCP Capital notes that Ethereum has shown strong support at the $2,900 level, defending this price point several times throughout the year.
Given the current market state, approval of the spot Ethereum ETH price could come as a bolt from the blue, triggering a “short squeeze that easily takes us back to the recent highs,” says QCP Capital. Since January, Ethereum price has risen to $4,066, although it remains below the all-time high of $4,891 set in November 2021. In this context, ETF approval could serve as a major catalyst for renewed bullish momentum. , which could push Ethereum back towards the upside. These levels.
However, so far, there are no clear signals from the US Securities and Exchange Commission (SEC) indicating imminent approval of the spot ETH ETF. The SEC may consider Ethereum as a security in its decision-making process, suggesting the odds of approval are “slim to none,” Bloomberg analyst Eric Balchunas said in a recent X post.
However, David Hahn, an analyst at cryptocurrency exchange Coinbase, said, He says “The market may be underestimating the timing and odds of potential approval,” he said, adding that the second-largest cryptocurrency by market cap “may have the potential to surprise to the upside in the coming months (…).”
The SEC is expected to make a decision on VanEck's application for a spot Ethereum ETF on May 23.