Is Ethereum set at $5,000? ETH open interest expands on CME ahead of spot ETF trading

Ethereum is in a downward trend, down about 18% from its March 2024 high. Confidence is high among analysts, even though bears are keeping spot rates in check and keeping the second-most valuable coin below $3,700.

ETH Futures Open Interest Increases on CME

Regarding X, one of them pointed out that there are clear signs that institutions are trying to push prices higher. “Big money” is likely taking advantage of the recent correction to accumulate ETH, the analyst said, noting that open interest for Ethereum futures on stock exchange CME is increasing.

ETH CME Futures Open Interest |  Source: @Ashcryptoreal via X

To reaffirm this outlook, the analyst said that the trend observed in the open interest of the Ethereum CME futures contract is a reliable signal.

Notably, this trend is similar to what happened with Bitcoin futures before the launch of spot Bitcoin exchange-traded funds (ETFs). For this reason, the analyst is confident that a similar pattern is being printed on Ethereum as well.

Ethereum is currently hitting low lows. Sellers were resilient, curtailing the upward momentum and putting a cap on the bulls.

So far, it appears that $3,700 is a resistance level that traders should monitor closely. The Bulls did not launch a counterattack after the breakthrough on June 7, and the weak breakthrough was confirmed four days later, on June 11.

Ethereum price is showing a downward trend on the daily chart |  Source: ETHUSDT on Binance, TradingView

Despite the current market conditions, the launch of an Ethereum spot ETF could still push the price to new levels. The analyst predicts an extension to $5,000 is likely, confirming the trend and a break above the current level in the first quarter of 2024.

Nonetheless, whether the uptrend can be brought under control will depend on how the price action plays out. Technically, open interest represents the cumulative sum of open positions and long-term leveraged positions. If buyers push the price higher, ETH could expand in the coming days and hit $3,700 this week.

Spot Ethereum ETF Optimism: Can It Succeed?

Additionally, recent activity surrounding spot Ethereum ETF applications supports this optimism. On June 21, seven applicants whose Form 19b-4s were recently approved filed amended S-1 registration statements with the Securities and Exchange Commission (SEC). Analysts now believe regulators could approve trading of these products by early July 2024.

While some analysts are bullish on Ethereum, they are not convinced that the spot Bitcoin ETF will enjoy similar success to what it saw when it began trading. Eric Balchunas, senior ETF analyst at Bloomberg, predicted that a spot Ethereum ETF would be successful if it captured just 20% of total capital inflows into Bitcoin.

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