Ethereum sees a 16% spike as Bloomberg analysts surprisingly increase approval odds to 75%

• Ethereum ETFs may see approval as Bloomberg analysts increase their approval odds from 25% to 75%.
• Grayscale CEO confirms resignation with only a few days left before SEC decides on spot Ethereum ETFs.
• Ethereum may test key support levels if spot ETH ETFs are denied.

Ethereum's (ETH) price gained over 16% on Monday as Bloomberg analysts updated their odds for spot Ethereum ETF approval to 75%. Grayscale’s CEO stepping down from his role days before the Securities & Exchange Commission (SEC) decides on the ETFs has also added complexity to the predictions of analysts.

Read more: Ethereum rallies 5% as Vitalik Buterin responds to criticism from community amid Coinbase ETH ETF prediction

Daily digest market movers: Ethereum ETF approval now in limbo

Ethereum is expected to experience increased volatility this week as the market anticipates the SEC's response to spot Ethereum ETF applications. SEC must decide whether to approve or deny Van Eck's spot Ethereum ETF application on May 23 and the Ark 21Shares Ethereum ETF application on May 24.

Ethereum is expected to experience increased volatility this week as the market anticipates the SEC's response to spot Ethereum ETF applications. SEC must decide whether to approve or deny Van Eck's spot Ethereum ETF application on May 23 and the Ark 21Shares Ethereum ETF application on May 24.

In an interesting flip of position, Bloomberg analysts Eric Balchunas and James Seyffart have upped their odds for Ethereum ETF approval from 25% to 75%. According to Balchunas, the SEC “could be doing a 180” due to increasing political pressure.

This comes after US presidential candidate Donald Trump made several pro-crypto statements in a campaign earlier in May. Many have speculated that President Joe Biden may make a pro-crypto move also to gain support from the crypto community.

Meanwhile, in an X post, Nate Geraci, President of the ETF Store, gave insight into the SEC approval process of ETFs and how it would affect the upcoming decisions. He stated that the SEC must approve both 19b-4s (exchange rule changes) and S-1s (registration statements) for an ETF to launch.

19b-4s is the filing that national exchanges like NASDAQ or the New York Stock Exchange (NYSE) submit to the SEC to seek approval for listing a new product on their trading platforms. In the context of ETFs, S-1s refer to the initial registration forms detailing how a fund would be managed and track the underlying asset's price.

Geraci says it's "technically possible for SEC to approve 19b-4s & then slow play S-1s," considering their reported lack of engagement.

However, Bloomberg analyst James Seyffart has said that if 19b-4s are approved, it would only be a matter of  "when" not "if " before S-1s applications are approved. He also clarified their approval odds only apply to 19b-4s filings.

This follows a report from CoinDesk that exchanges have been asked to update their 19b-4s filings on an accelerated basis.

Also read: Ethereum drops below $3,000 again, spot ETH ETF sparks debate in crypto community

Meanwhile, Grayscale CEO Michael Sonnenshein has stepped down, according to a report from The Wall Street Journal. Peter Mintzberg, head of strategy for Goldman Sachs's asset and wealth management division, will take over as new CEO in August.

Sonnenshein also confirmed his departure from the digital asset management firm in an X post on Monday. This follows Grayscale's withdrawal of its application for a futures Ethereum ETF earlier in May.

With both events coming only a few days before the SEC decides on Ethereum ETF applications, many crypto community members earlier reduced their odds for an approval. But with the recent update from Bloomberg analysts, things may turn out positive for Ethereum.

ETH technical analysis: Ethereum may test key support levels

Ethereum is trading around $3,566 on Monday seeing more than a 16% increase on the day. With the SEC's decision on Van Eck's spot ETH application coming on Thursday, investors should watch out for high volatility.

The $3,029 support may prove key in the next few days before the event. A dip below the support indicates a high bearish sentiment from expectations that the SEC will deny the application. However, with recent price movement, ETH is aiming for the $3,730 resistance as expectations have switched bullish for spot Ethereum ETFs.

Read more: Week Ahead: Ethereum and DeFi to come under spotlight this week

According to QCP, "Given the resounding lack of interest in the market, the risk is to the topside with a surprise approval catching everyone off guard, triggering a short squeeze taking us easily back to recent highs."

ETH/USDT 4-hour chart

A denial of spot ETH applications may trigger a wide dip following the fair value gap on Monday. However, ETH may not sustain any decline below the $2,914 to $2,852 range as it has shown strength in weathering dips within the past three months.

 

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