Bitcoin is currently trading at $68,900, while Ethereum (ETH) is experiencing a 4% loss for the day. Despite market volatility, there is positive news from the Ethereum camp, with significant events such as the Dencun update and ETF developments supporting optimism. What will happen to the price? What do the latest predictions indicate?
Will Ethereum (ETH) Rise?
Grayscale has updated its Ether ETF application, with the SEC set to make its final decision on May 23rd. Additionally, the Dencun update took place this week. These two developments should have a positive impact on the price, but this has not been visibly the case yet. There are two reasons for this.
- The Dencun update is positive for the ETH price due to its potential to reduce transaction fees through layer2 solutions and support network activity. We should see the effects of this in terms of network activity in a few months.
- Optimism regarding the ETF approval is not as strong as it was for Bitcoin. This is because there have been developments in the BTC process, such as the Grayscale case, which support approval. Responses to the SEC’s requests for comments by May and even speculation about taking the matter to court (perhaps in the event of a possible rejection?) could increase speculation and support the price.
On the other hand, ETH funding rates have consistently been above 0.03% in eight-hour periods, indicating that despite the price drop, investors in the futures market are not in despair. In the last 10 days, demand for Ether call options has outpaced the demand for protective put options by an average margin of 60%, which supports a bullish sentiment.
ETH Price Prediction
The second-largest cryptocurrency by market value has faced spot sales as the BTC price fell and macro pressures increased. However, it is normal for sales to occur as short-term investors did not see the peak above $4,000 they wanted.
Yet, a strong stance above $3,600 suggests we might see new peaks above $4,000 before the month ends. Moreover, it is important to note that we are in a “bull market,” meaning we should experience a process opposite to what we see in a bear market, with intermittent corrections. Just as in a bear market, the price seems to fall endlessly despite temporary rises; today, we should not see continuous drops (like the temporary price increases in a bear market).
If the ETH price loses the $3,600 level and BTC starts a few weeks of a downward trend, then the ETH price could drop to $3,200. If overselling occurs through the ETF channel during this period, the price could even fall to $2,997.
