Amidst a widespread sell-off in the cryptocurrency market, Ethereum (ETH), the largest altcoin by market capitalization, has experienced a price dip, currently trading at $2,421, marking a 2.02% decrease. Crypto analyst Ali Martinez highlights that ETH is maintaining its position above a critical demand zone ranging from $2,388 to $2,460, suggesting a potential upward trajectory if this support holds.
However, Martinez warns of a potential decline if ETH fails to stay above this support, with the next significant support level estimated around $2,000. Ethereum’s upcoming ‘Dencun’ update is expected to be tested on the Sepolia testnet by January 30, with further details to be provided in a blog post on January 23.
There is optimism regarding the approval of Ark 21Shares’ spot Ethereum ETF by the SEC by the deadline of May 23. Despite this, JPMorgan casts doubt, estimating the likelihood of approval by May to be less than 50%. The narrative of a spot Bitcoin ETF in the previous year has shifted attention to Ethereum as the next likely candidate for a spot ETF approval in the US.
JPMorgan notes that the expectation is reflected in the discount to the net asset value (NAV) of the Grayscale Ethereum Trust (ETHE), which has been narrowing since summer 2023 and has stabilized around 12% in the last two months. The bank also suggests that the SEC’s decision not to reference ETH in a recent securities law violation case could indicate a tendency to classify the altcoin as a commodity in the coming months, a crucial condition for spot ETF approval.
Others argue that the approval of ETFs based on Ethereum futures last September implies that ETH is naturally considered a commodity, further supporting the case for spot ETF approval.