Ethereum (ETH) Price Remains Steady at $3,800 Despite SEC’s Historic Approval of 8 Spot Ethereum ETFs

Following a landmark decision by the U.S. Securities and Exchange Commission (SEC) to approve not just one, but eight spot ethereum Exchange-Traded Funds (ETFs) on Thursday, May 23, the market response has been curiously muted. Despite this regulatory green light, which many anticipated would inject bullish momentum into the market, the price of Ether (ETH) has hovered around $3,850, displaying a notable absence of the expected significant uptrend. This calm follows a robust rally where ETH soared by over 31.5% in the previous week, leading to speculation among investors about whether this might culminate in a classic “sell the news” scenario.

In the lead-up to the SEC’s announcement, the ETH market experienced considerable volatility. Just before the closure of traditional U.S. markets, ETH’s price momentarily dipped to $3,550, only to rebound impressively to nearly $3,950 on the back of preliminary reports hinting at the ETF approvals. The price eventually stabilized above $3,850 post-confirmation. This period of intense fluctuation was marked by significant activity, including a panic sale by a whale who offloaded 7,921 ETH, valued at approximately $29.7 million, at an average price of $3,754 per ETH.

The market’s volatility was further underscored by a spike in liquidations of leveraged crypto derivative positions, which surpassed $355 million on the day of the announcement, marking a peak not seen since the beginning of May. The majority of these liquidations were long positions, totaling around $255 million, suggesting that many traders, caught off-guard by the swift price drop, were overly optimistic in their market outlook. Ethereum traders were particularly hard hit, with liquidations totaling $137 million.

Despite the immediate market response—or lack thereof—the approval of these spot Ethereum ETFs holds significant potential for the cryptocurrency market. Analysts have projected that these ETFs could attract over $510 million in inflows, although such developments may take time to materialize and influence the market trend positively. On-chain indicators and market analysts remain bullish on Ethereum’s prospects, with predictions suggesting that ETH could establish a solid base above $4,000 and potentially rally towards the $5,000 to $6,000 range by late summer.

The introduction of bitcoin ETFs previously led to substantial institutional inflows, highlighting the impact regulatory approval can have on digital assets. With Ethereum now joining the ranks of SEC-approved ETFs, the focus shifts to whether this will pave the way for greater institutional adoption and investment in the second-largest cryptocurrency by market capitalization. As the market continues to digest this news and adjust to the evolving regulatory landscape, the long-term implications of these Ethereum ETFs on market dynamics, investor sentiment, and institutional participation remain to be fully realized.