Ethereum ETF Approval Is Done. But Where Next For ETH Price?

Summary:
• ETH price declined in the hours following the Ethereum ETF approval by the SEC on May 23. Could the momentum be building for a blastoff?

Ethereum ETF approval finally happened on Thursday, but ETH price has subsided following the news. As of this writing, ETHUSD traded at $3,707.88, after going down by 1.85 percent in the intraday session. The decline was not much of a surprise, and I mentioned this in an earlier article. Nonetheless, the ETF approval, which affected eight issuers, is a major milestone in the history of cryptocurrency.

The SEC approved the fillings of ARK Invest 21Shares, Grayscale, BlackRock, Fidelity, Franklin,  Bitwise Invesco Galaxy and VanEck. However, the ETFs will not be available for purchase yet, as the 19B-4 form approval only gives the firms the go ahead to list their products and not trading. In the interim, they still have to wait for the processing of their S-1 filings, which is an important legal step, but largely seen as a formality at this stage.

The Ethereum ETF approval not only solidifies an earlier approval of Bitcoin ETF by the Securities Exchanges Commission (SEC), but it also establishes Ether as a regulated financial asset that major institutions can confidently invest in. This should, in theory, trigger a spike in the demand for ETH, which, in turn, will likely trigger a price surge. However, having sold the news, we are likely to see Ether decline as investors take profit after the recent price rally. That said, the downside is likely to be limited, as investors will be keen not to oversell their assets in anticipation of a potential rebound.

For now, it could take weeks before the impact of the Ethereum ETF approvals is felt in the market as it could take weeks for the S-1 to be approved and for trading to start. However, the crypto market has been sending signals of a potential post-halving rally in the last two weeks, and that, too could provide fuel to propel ETH prices up.

Technical analysis

The momentum on Ethereum price is currently tilted towards the downside, and the sellers will likely remain in control if resistance persists at the 3,250.56 pivot mark. The first support will likely be at 3,675.92, but a continuation of control by the sellers will break that mark.
Furthermore, the resulting momentum could push the ETHUSD pair lower to test 3,632.48. On the other hand, a break above the pivot will favour the buyers to take control. The upward momentum could, however, meet the first resistance at 3,789.51, but a continuation of control by the buyers will breach it. Furthermore, the resulting momentum will invalidate the downside narrative and potentially build the momentum to move the price to 3,844.74.