ETH takes the spotlight as traders increase exposure ahead of ETF approval
As anticipation builds for the potential approval of a spot Ethereum (ETH) exchange-traded fund (ETF), traders are placing their bets on ETH over Bitcoin (BTC).
A report from CryptoQuant reveals that the ETH-BTC open interest ratio has risen from 0.54 to 0.67 in the past week. This indicates that traders are opting for higher exposure to Ethereum in anticipation of the spot ETH ETF approval.
Data from Santiment shows that the total open interest for ETH currently stands at $8.53 billion. Additionally, the aggregated Ethereum funding rate increased from 0.016% to 0.018% in the last 24 hours.
This data suggests that more traders are expecting a further surge in ETH price and that high volatility may lead to significant liquidations.
CryptoQuant also reports an increase in demand for Ethereum from “Permanent Holders,” who accumulate assets without selling. These holders accumulated over 100,000 ETH on May 20, marking the highest level since September 2023.
Interestingly, despite the growing accumulation and interest, there have been 62,000 ETH inflows into exchanges on May 20. Most of these assets flowed into Binance and Bybit.
Santiment data shows a 40% decline in whale transactions (transactions consisting of at least $100,000 worth of ETH) in the past 24 hours, with 10,689 transactions per day currently. This, coupled with the exchange inflows, suggests that investors are eagerly awaiting the approval of the ETH ETF and expecting short-term profit-taking to result in high price volatility.
At the time of writing, ETH has experienced a 1.7% increase in the past 24 hours, reaching a trading price of $1,810. Its market capitalization sits at $457 billion, with a daily trading volume of $24.6 billion.
It’s important to note that if the U.S. Securities and Exchange Commission (SEC) rejects or delays the spot ETH ETFs, Ethereum could face a significant downward momentum.
As the market awaits the decision on the ETF approval, the cryptocurrency space is witnessing a resurgence. Nansen, a popular crypto analytics platform, also noted that the approval of an Ether ETF and a decline in interest rates have contributed to the recovery of the broader crypto market.