Ethereum is flat, trending higher, and outperforming the world's most valuable currency, Bitcoin. Earlier in the day, Ethereum prices broke the $3,900 level before falling sharply to below $3,800 and bouncing back to spot prices.
In an attempt to explain the unexpectedly high volatility, especially with prices rapidly falling from $3,900 and falling below $3,800, some analysts claim that a large sell order by maximum extractable value (MEV) trading firm, Symbolic Capital Partners, may be the trigger. Administrator.
Ethereum is volatile above $3,800: a possible explanation
In a post on X, one cryptocurrency journalist cited another source, He said Symonic Capital Partners offloaded 6,968 ETH, worth over $27 million, at an average sale price of $3,930 in one minute. Notably, one of these transactions involved the simultaneous sale of 3,497 Ethereum, worth $1 'High bribery fees' Worth 90 Ethereum.
While the exact motive behind this bulk dump remains unclear, their actions appear to have affected prices, causing them to fluctuate.
At spot prices, Ethereum is up 30% from its May 2024 lows. Technically, the uptrend remains in place as long as prices trade above the $3,700 level. On May 20, Ethereum prices exceeded $3,300 and $3,700. These were two major resistance levels that are now being supported.
As long as prices head above $3,700, the bulls may have a basis for another rally, taking them to the March highs of around $4,100.
Even with ETH volatility rising, overall sentiment remains positive. One of the analysts at X Notes Over the past three weeks, open interest in Ethereum futures across several exchanges, such as Binance, OKX, and even Bybit, has risen to over $4.6 billion.
Open interest is a metric that shows the number of open leveraged positions, long or short. When the number increases, traders become confident about the currency's prospects.
Spot ETH ETF fuels interest
So far, the excitement around Ethereum has been linked to positive progress in the approval of exchange-traded funds (ETFs). As I write, the SEC is actively reaching out to potential issuers. Changes have been requested, especially regarding ETH.
Some analysts believe that the lack of staking capabilities for Ethereum ETFs is an overall positive. In a post on X, the analyst Argue If issuers of Ethereum ETFs are allowed to participate, returns will decline, reducing returns for individual stakers. This, in turn, will make individual staking less attractive, affecting the decentralization of the network.
Featured image from Canva, chart from TradingView