The deadline for the U.S. Securities and Exchange Commission (SEC) to make a decision on the Bitcoin (BTC) ETF is approaching, and there is optimism in the market about its approval. This decision could have significant implications for the crypto market, including Ethereum (ETH), the second-largest cryptocurrency.
If a Bitcoin ETF is approved, it could set a regulatory precedent that would make it easier for other crypto-based ETFs to be created. The reasoning behind this is that the approval of a Bitcoin ETF would likely involve establishing a framework that could be applied to other cryptocurrencies, including Ethereum.
In December 2023, the SEC postponed its decision on several Ethereum ETF applications until May 2024. This includes applications from Hashdex Nasdaq, Grayscale, VanEck, Cathie Wood’s ARK Invest, and 21Shares. These delays are a normal part of the SEC’s process, which involves gathering public input before making a decision on whether to list these ETFs. However, they also come at a time when the commission is trying to determine whether some proof-of-stake (PoS) cryptocurrencies should be classified as securities.
Interestingly, Ethereum has not been classified as a security in any of the SEC’s recent lawsuits against crypto exchanges. The commission has also not disputed Ethereum’s classification through the ETF registration process with the Commodity Futures Trading Commission (CFTC). This raises the possibility that a spot Ethereum ETF could be approved in the U.S. by May 2024, which would likely boost ETH prices.
From a technical perspective, ETH’s price is currently near the resistance trendline of its rising wedge pattern as the Bitcoin ETF decision approaches. If the decision is delayed or denied, there may be a price correction towards the lower trendline of the wedge, which is around $1,865 by February.
On the other hand, if an ETF is approved, Ethereum may invalidate its rising wedge setup and form an ascending triangle reversal pattern. The upside target for this pattern is around $3,870 by March, which is a 75% increase from the current price levels and coincides with the 0.786 Fibonacci line.
It is important to note that this article does not provide investment advice or recommendations. Investing and trading in cryptocurrencies carries risks, and readers should conduct their own research before making any decisions.