With the highly anticipated approval of a potential Ethereum (ETH) exchange-traded fund (ETF) on the horizon, traders are demonstrating a growing preference for ETH over Bitcoin (BTC).
A recent report from CryptoQuant, obtained by crypto.news, has revealed that the ETH-BTC open interest ratio has increased from 0.54 to 0.67 over the past week. This signifies that traders are allocating a larger portion of their exposure to Ethereum in anticipation of the potential approval of the spot ETH ETF.
Data from Santiment further supports this trend, showing that the total open interest for ETH currently amounts to $8.53 billion. Additionally, the total funding rate for Ethereum has risen from 0.016% to 0.018% in the past 24 hours, indicating a growing number of traders are placing bets on an upward price movement for ETH. However, the heightened price volatility could result in significant market liquidations.
Moreover, data from CryptoQuant indicates an increase in demand from “Permanent Holders,” a category of holders who accumulate an asset without selling, excluding exchange addresses. These addresses accumulated over 100,000 ETH on May 20, marking the highest level since September 2023.
Despite the growing accumulation and interest in Ethereum, there has been a significant net inflow of ETH into exchanges, with 62,000 tokens being deposited on May 20. The majority of these assets were deposited into Binance and Bybit crypto exchanges.
Additionally, the number of whale transactions involving at least $100,000 worth of ETH has decreased by 40% in the past 24 hours, with only 10,689 transactions recorded per day, according to Santiment data.
This combination of decreased whale transactions and increased exchange inflows suggests that investors are eagerly awaiting the decision on the ETH ETF, which could result in high price volatility as traders seek to capitalize on short-term profits.
At the time of writing, ETH has experienced a 1.7% increase in the past 24 hours, with a trading price of $1,810 and a market cap of $457 billion. Its daily trading volume stands at $24.6 billion.
It is important to note that a rejection or delay in the approval of the spot ETH ETFs by the U.S. SEC could potentially lead to a sharp downward momentum for Ethereum.
In conclusion, the increasing trader exposure to Ethereum leading up to the potential ETF approval reflects a growing bullish sentiment towards the cryptocurrency. However, the market remains susceptible to heightened volatility pending the regulatory decision. As the cryptocurrency community eagerly awaits the outcome, all eyes are on the SEC’s ruling and its potential impact on the future of ETH trading.
