Will Ethereum Prosper with ETF Approval?

In a significant development for the cryptocurrency market, the U.S. Securities and Exchange Commission (SEC) has approved eight spot Ether exchange-traded funds (ETFs) on the 23rd of May, 2024. The green light by the American financial watchdog represents a major milestone for cryptocurrencies.

This milestone, following the earlier acceptance of Bitcoin ETFs, signifies increasing regulatory acceptance of cryptocurrencies. Bitcoin ETFs have set a blockbuster precedent, legitimizing cryptocurrencies among conservative investors and attracting substantial daily trading volumes.

Ethereum ETFs are poised to build on this foundation by allowing investors to gain exposure to a pivotal technology in decentralized finance without the complexities of direct cryptocurrency handling.

Ethereum's technical side

Since March 2024, Ethereum prices began a corrective move, which concluded on Tuesday, May 21, as market structures turned bullish again.

It is currently feasible to enter buy positions with targets extending to the External Buy-side Liquidity (EBSL) and potentially reaching the current All-Time High (ATH), which is just below the key psychological level of $5,000.

When to buy Ethereum?

ETHUSD - 1 Day Time Frame

For traders and investors looking for more favorable conditions, waiting for a short-term decline to key support zones may be advisable. One such zone is the Inversion Fair Value Gap (IFVG), which aligns with another important area, the Fair Value Gap (FVG).

A decline to these zones would present a retail opportunity in the market, prompting the formation of a double top or a classic resistance point, thus accumulating a volume of stop-loss (buy stop) orders above the external high.

This setup could later act as a counterparty for profit-taking from buy positions.

The strategy for maintaining most of the volume of buy positions involves ensuring that the price does not close below the lower level of the FVG on the daily timeframe, keeping the FVG open and supportive.