Market Signals May 27th, 2024: SEC approved Ethereum ETF, Crypto Market Poised for Surge

Update 28 May 2024 • Reading Time 5 Minute

Reading Time: 5 minutes

The past week has seen a wave of excitement in the crypto market following the SEC’s approval of Ethereum Spot ETFs. Eight Ethereum Spot ETFs have received the green light, belonging to major players such as BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton.

This news had an immediate and positive impact on crypto prices. Bitcoin (BTC) surged briefly past $71,785 before settling back to the $68,000-$69,000 range.

Ethereum (ETH) experienced a dramatic spike, jumping from $3,000 to $3,900. This surge also positively affected other tokens in the Ethereum ecosystem, including ENS, ETHFI, REZ, and PEPE, all of which saw significant rallies.

As a result, the total crypto market capitalization increased by $150 billion, reaching $2.51 trillion at the time of writing.

The Pintu Academy team has compiled valuable insights from several crypto projects. We analyze that information to determine its potential impact on various asset prices. Will these be bullish or bearish catalysts? Find out in the following article.

It should be noted that all information in this Market Signal is intended for educational purposes, not as financial advice. Do your own research before making any financial decisions!

Ethereum (ETH) ➡️ Bullish 🚀

After a lengthy tug-of-war, the SEC finally approved eight Ethereum spot ETF proposals. The SEC’s stance shift is inseparable from the political situation in the United States. As the election approaches, Donald Trump and Joe Biden are trying to attract votes from the crypto community.

Trump openly supported crypto by stating that the US should be a leading country in the industry. Meanwhile, the Biden administration did not want to appear anti-crypto, so it approved the spot Ethereum ETF.

Although it has been approved, the Ethereum Spot ETF product will still need to be launched in a few weeks or months. However, this news has been a positive catalyst that has lifted the price of ETH.

ETH’s movement is still on an upward trend after the news of the ETF approval. This is in contrast to what happened with the announcement of the Bitcoin spot ETF. At that time, BTC experienced sell the news, and its price decreased. However, in the long run, the existence of the spot Bitcoin ETF managed to help BTC break through the new ATH level.

Will the ETH price trend post ETF announcement follow the BTC price trend post ETF announcement?

ETH price is currently 24% lower than its ATH level of $4,868 or IDR 69.531.233. Therefore, the hype around spot Ethereum ETFs could drive further ETH price gains this week. However, watch out for profit-taking that increases selling pressure and could trigger a correction in ETH.

ENS, ETHFI, PEPE ➡️ Bullish 🚀

Like a chain effect, the rising price of ETH will lift the prices of various tokens in its ecosystem. After the approval of the Ethereum spot ETF, tokens such as Ethereum Name Service (ENS), Ether.fi (ETHFI), Renzo (REZ), and PEPE have increased significantly.

The same thing happened to tokens in the ecosystem or related to Bitcoin. After the announcement of the approval of the ETH Bitcoin spot, the prices of ORDI, BCH, and SATS tokens increased significantly.

As the hype around the spot Ethereum ETF continues to fuel the rise of ETH, tokens such as ENS, ETHFI, REZ, PEPE, etc. may also be in a bullish trend.

UniSwap (UNI) ➡️ Bullish 🚀

Another token that could be in a bullish trend this week is UniSwap (UNI). A positive catalyst that may lift its price is the on-chain voting process for the proposal regarding the new fee mechanism on May 31.

Any fees generated by Uniswap will be directly distributed to liquidity providers that provide asset supply on the Uniswap platform. The new proposal plans to distribute the fee to UNI owners who stake their tokens. In other words, UniSwap incentivizes token holders who actively participate in their ecosystem.

For information, the Uniswap Foundation managed to book a profit of $41.1 million in fiat and stablecoins and 730,000 in UNI at the end of the first quarter of 2024.

Responding to these catalysts, the UNI token price has been on an upward trend recently. Most recently, UNI experienced a 32.30% upward rally to the $11.79 area and crossed the 50% Fibonacci retracement line. Now, the line has become an important support for UNI in the future. If it manages to stay above, UNI’s rally will likely continue.

Sei Network (SEI) ➡️ Uncertain⚖️

Sei Network will launch Sei V2 this week. They will bring the parallelized Ethereum Virtual Machine (EVM) V2 in the upgrade. Through parallelization, Sei V2 will have a high level of scalability like other high-performance blockchains such as Solana.

This upgrade also improves the Sei Network’s composability. Various Ethereum-based protocols, such as Uniswap, Frax, X2Y2, Bancor, Balancer, Rarible, Layer Zero, Nansen, and The Graph, are rumored to be launched on Sei V2. Before this, Sei Network only supported Cosmos-based dApps that use the Rust programming language.

Although this update is positive, it isn’t easy to guess its impact on SEI prices in the short term. The market may have priced in the sentiment, so prices will tend to stagnate or even correct due to sell the news.

However, if Sei V2 manages to attract a lot of interest from the dApps team and records positive metric growth, SEI prices can continue to rise. Currently, SEI is trading at IDR 8,695.

dYdX (DYDX) ➡️ Uncertain⚖️

dYdX (DYDX) will hold its token unlock agenda on June 1, 2024. However, it is unclear whether this agenda will have a bearish or bullish impact. The reason is that DYDX’s token unlock allocation is 33.33 million tokens, or about 11.1 of the total circulation. This amount is equivalent to US$69.97 million.

The additional supply of tokens could trigger volatility in DYDX prices in the short term, especially since the allocation is aimed at investors, who tend to cause selling pressure. However, if the demand that arises can compensate or investors do not sell it, the DYDX price could stagnate or strengthen slightly.