Like Bitcoin and top altcoins including Solana, Ethereum has been holding steady. At the time of writing, it is trading above local support at $3,300 and is rising, targeting $3,700.
Speculators Float to ETH as Bulls Aim for $3,700
This growth is being driven by a number of market-related factors, most notably the expected launch of a spot Ethereum ETF in the next few days. As seen on the daily chart, the news of the expedited approval of Forms 19b-4 by the U.S. Securities and Exchange Commission (SEC) has sparked a wave of demand since May 20.
However, speculators are permeating the scene even as prices remain stable and rise. CryptoQuant data shows that the estimated leverage ratio has increased over the past few trading days.
As this rate increases, more and more leveraged traders enter the ETH scene, more interested in profiting from price volatility than in benefiting from what ETH has to offer as a digital asset.
According to CryptoquantumThe estimated leverage ratio was 0.347 on July 16, which increased to 0.354 on July 17. This escalate suggests that investors are increasingly borrowing funds on perpetual trading platforms such as Binance and OKX, hoping to make a profit if ETH bulls push prices above $3,700.
As prices rise, the estimated leverage ratio is likely to escalate even more. The local peak is 0.358, as recorded on July 14. The total leverage ratio was 0.392, recorded in early July 2024.
Eyes On Spot Ethereum ETF: Will It Be A Success?
Ethereum traders are confident that prices will surge, even surpassing record highs, once the spot ETH ETF launches. Recent reports show that the derivative product will launch early next week, allowing institutional investors to gain exposure.
The US SEC has given the green airy to three issuers to launch. However, it is expected that all spot Ethereum ETF applicants whose Forms 19b-4 have been approved will be able to launch simultaneously.
There is a high probability that the Ethereum spot ETF will follow in the footsteps of the success of the Bitcoin spot ETF. According to Soso ValueAll issuers of Bitcoin ETFs collectively managed more than $53 billion in BTC (as of July 18).
Still, while this product is highly anticipated and will likely have a positive impact on prices, demand for it will be different than when spot Bitcoin ETFs were launched.
Analysts attribute this to Ethereum’s lower market capitalization and the US SEC’s decision not to allow spot ETF issuers to stake ETH. Through staking, issuers would receive rewards on behalf of their customers.
Featured image from Canva, Chart from TradingView
