The Securities & Exchange Commission (SEC) has delayed its decision on Ethereum ETF S-1 drafts, leading analysts to revise their potential launch date once again. A recent decline in Ethereum’s price has heightened the bearish outlook after ETH dropped below a key support level, resulting in $90 million in long liquidations.
Despite comments on issuers’ S-1 drafts, the SEC has yet to approve spot ETH ETFs following the US Independence Day holiday. Bloomberg analyst James Seyffart now predicts a potential approval by next weekend. The SEC approved spot ETH ETF issuers’ 19b-4 filings in May but requires approval of their S-1s before the products can go live.
In response to the market decline, a large Ethereum holder risks liquidation if ETH falls to $2,984. The holder deposited 12,734 ETH to Compound and borrowed $31.4 million in stablecoins.
Ethereum is currently trading around $3,132, down over 5% on the day. The breach of the $3,203 support level has strengthened the bearish sentiment. The market inefficiency caused by the SEC’s decision on spot ETH ETFs has been balanced out by recent price movements.
ETH may test the $3,029 support level, with a potential bounce cooling the bearish momentum. However, a move below this level could see ETH seeking support at $2,852. Futures open interest for Ethereum has decreased by almost 5%, indicating wider risk aversion from traders. Despite declining prices, CME open interest for Ethereum has risen by almost 1%, suggesting some bullish sentiment among US investors anticipating the launch of spot ETH ETFs.
Overall, the delay in SEC approval for Ethereum ETFs has impacted the market sentiment. Investors are closely monitoring the situation for potential market movements in the near future.