If Ethereum ETF is rejected, Ethereum price will see pullback and volatility

CryptoQuant said that if the Ethereum ETF is rejected, the Ethereum price will see a correction and volatility! On-chain analytics firm CryptoQuant warned that Ethereum prices could be volatile if a pending spot Ethereum ETF encounters uncertainty. Today, the editor of this site will share with you a detailed introduction to the correction and fluctuations in the price of Ethereum if the Ethereum ETF is rejected. Friends in need should take a look!

Ethereum prices will see corrections and volatility

The agency warned that if the SEC rejects the ETH ETF application or delays the approval process, ETH may will experience “significant price adjustments.”

Additionally, high transaction flow may cause ETH price volatility in the coming days. Amid rumors of a spot ETH ETF pending approval, trading flow reached 62,000 ETH, the highest level since March.

Although it may have dipped a bit, ETH prices are rising within days following rumors that the U.S. Securities and Exchange Commission (SEC) will approve a spot ETF tied to the digital asset.

As of press time on May 22, Ethereum was trading at $3,735, up approximately 21% in 24 hours, according to CryptoSlate.

CryptoQuant stated that traders aggressively opened long positions in the future market in anticipation of price increases, resulting in upward pressure on prices, causing ETH holdings to increase from 2.8 to 3.2 million ETH, a record high in January 2023. highest level since.

This activity resulted in a short squeeze and cascading short liquidation.

Permanent ETH holders, or accounts that hold but do not sell ETH, also create upward price pressure by purchasing large amounts of ETH. Perpetual holders purchased over 100,000 ETH in one day, the highest single-day amount since September 2023.

The ETH perpetual futures market is dominated by buy orders, and the taker buy/sell ratio is higher than 1, which puts further pressure on the market.

ETH short position liquidation reached 9,300 ETH, setting the highest hourly volume since 2024 and triggering a short squeeze in the futures market.

The SEC must make a decision on VanEck’s spot ETH ETF proposal on May 23, but a decision on a similar filing could come at the same time.

The approval process is still in progress. On May 21, Cboe filed a 19b-4 rule change on behalf of five ETH ETF issuers. Nasdaq also amended BlackRock’s 19b-4 filing, while NYSE Arca filed updates to Grayscale’s Ethereum Mini Trust and Bitwise’s filings.

FOX Business reporter Eleanor Terrett said that the SEC and the issuer are currently negotiating the S-1 registration statement. Bloomberg ETF analyst James Seyffart believes that it may take weeks or months for the fund to launch after receiving initial approval.

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