Ether, the second-largest cryptocurrency by market cap, lost 21% of its value this week. It hit a 50-day low and failed to break through the key $3,200 barrier on April 14. Traders are afraid that it won’t be able to hold on to the $3,000 level, even though it has partly recovered.
Even though on-chain and swaps data aren’t always apparent, investors are hopeful that a spot Ether exchange-traded fund (ETF) will be approved in May. Jan van Eck, CEO of the investment firm VanEck, wasn’t sure if the approval would go through. He said that the SEC hadn’t said anything about ongoing applications for a long time, even ones from prominent firms like BlackRock and Fidelity.
Ether’s ETF Approval Odds Questioned Amid Uncertainty
Analysts at Bloomberg, Eric Balchunas and James Seyffart, also had questions. They said that the SEC’s silence could be because the chances of approval are low, possibly around 35%. They are even more skeptical because the government hasn’t given them any negative feedback.
But it would be too simple to say that Ether’s latest drop was only caused by ETF speculation. Bitcoin, the most popular cryptocurrency, also dropped 14%, which suggests that bigger market factors are at play. When you look at Ether’s drop compared to its competitors, you can see that it has dropped 15% since April 9, which is more than BNB and Tron.
Still, Ethereum’s network activity, shown by the amount of total value locked (TVL) and DApp transactions, is still strong.DefiLlama said that Ethereum’s TVL hit its best level in 13 months. On the other hand, Tron’s accounts went down a little and BNB Chain’s TVL stayed the same.
Also, DappRadar said that ETH has the most DApps, even though the number of open addresses has gone down a little.The options skew measure for ETH, on the other hand, changed from bullish to bearish on April 16. This shows that more people want to protect themselves from losses.
Ether’s value is going up because people are waiting for an ETF decision and the network is strong in general. But derivative signs tell us not to get too comfortable. It’s still not clear what the market will do if prices drop below $2,900 even more.
