Following the approval of eight spot Ethereum ETFs by the U.S. Securities and Exchange Commission (SEC) on Thursday, May 23, the price of Ether (ETH) has remained stagnant at $3,800, showing no significant signs of an upward trend.
Despite this, ETH has experienced a notable rally of over 30% in the past week. Investors are currently adopting a cautious stance, observing whether this development will result in a “sell-the-news” event.
Ahead of the U.S. SEC announcing its decision to spot Ethereum ETF approval, the ETH price witnessed some wild swings. In the tense hour preceding the official approval, ETH initially dropped to $3,500 around the time of the traditional U.S. market close.
Subsequently, it surged close to $3,900 upon the emergence of initial unconfirmed reports suggesting approval, ultimately settling above $3,800 after confirmation. Amid these massive price fluctuations, it turns out that a whale sold a staggering 7,900 ETH holdings worth $29 million.
After $ETH dropped, a whale panic sold 7,921 $ETH at a price of 29.7M $USDT for $3,754.
The whale is a user of https://t.co/ZZPnpTmYqj, and his $ETH was withdrawn from https://t.co/ZZPnpTmYqj.https://t.co/CaE9aRb4XR pic.twitter.com/Pbjlhsw4Pi
— Lookonchain (@lookonchain) May 23, 2024
During the turbulent episode, liquidations of leveraged crypto derivative positions surged to over $350 million throughout the day, marking the highest figure since May 1, according to CoinGlass data.
The majority of these liquidated positions were longs anticipating price increases, totaling approximately $250 million. This indicates that traders who had overextended themselves with leverage were taken by surprise by the abrupt price drop. Among the affected, ETH traders bore the brunt, with $132 million in liquidations.
The approval of the spot Ethereum ETFs could drive more than $500 million in inflows as predicted by analysts. However, this might take some time to realize and kickstart the uptrend.
Several on-chain indicators have been pointing out that Ethereum can easily form a base above $4,000 and can continue rallying to $5,000-$6,000 up until August this year.
While the approval of the Bitcoin ETFs led to strong institutional inflows, it will be interesting to see whether the Ether ETF launch could lead to greater institutional adoption.
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