Investors are extremely optimistic ahead of the potential approval of spot Ethereum ETFs. The hype around the green light was reignited on Monday after ETF analysts revised their prediction to a 75% chance from 25%. Crypto prices rallied in general with Ether taking the lead towards the psychological resistance at $4,000. Based on the current Ethereum price forecast, the market is thawing with optimism for a large breakout eyeing new record highs around $5,000.
Ethereum hovered at $3,715 on Wednesday, sustaining a 1.8% drop in 24 hours. A 32% dip in the trading volume to $29 billion according to CoinMarketCap backs the intent to sell the news and take early profits.
Ethereum Price Forecast As Open Interest Soars To $15B
Following the activation of the Ethereum ETF frenzy, open interest in the ETH futures market soared to $14.87 billion from $11.25 billion, representing a 24.3% growth in three days.
An increase in open interest often backs a bullish outlook in the cryptocurrency. It reveals the rise in investor interest, suggesting that buyers have the upper hand.
The crypto greed & fear index reinforces the growing sentiment, holding at 76 from 64 last week.
This metric measures the current sentiment in the crypto market, keeping in mind fear signals worry—interpreted as an opportunity to buy. On the other hand, greed implies that the market could be due for a correction.
That said, it might be wise to wait until the ETF is approved to avoid sudden corrections, in case the SEC rejects the applications. Some investors would be ready to sell in case of unfavorable news.
What Next As Ethereum Price Wobbles
The crypto market faced high volatility on Wednesday, further destabilizing Ethereum’s bullish structure. A correction below the $3,700 level appeared imminent, reflecting Bitcoin’s drop to $69,500 as seen on CoinGecko.
As the Relative Strength Index (RSI) retreats into the neutral area from a two-month high at 72, the path of least resistance may gradually shift downwards. If support at $3,600 weakens and declines increase, the grey band will stand in line to prevent more bleeding toward $3,000.
Nevertheless, a recently formed golden cross pattern may be worth considering, especially for traders who might be in panic mode. This pattern was established when the 20-day Exponential Moving Average (EMA) climbed above the 50-day EMA.
It affirmed the general bullish outlook in Ethereum. Hence, the importance of following the long-term outlook as opposed to reacting to sudden short-term movements in the market.
As discussed earlier, a 75% chance of the ETF approval cannot be ignored. Therefore, the following days will be important in determining whether Ethereum will set the momentum for a parabolic rally to $10,000 or a drop below $3,000.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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