Ethereum Set For $5,000? ETH Open Interest Expanding On CME Ahead Of Spot ETFs Trading

At the time of writing, Ethereum is in a downtrend, down about 18% from its highs in March 2024. Spot rates seem to favor the bears, keeping the second most valuable coin below $3,700, but confidence is growing among analysts.

CME ETH Futures Open Interest Increases

When you talk to X, one of them I got it. There are sure signs that institutional investors are poised to push the price higher. Citing an increase in open interest in Ethereum futures on stock exchange CME, the analyst said that “large investors” are likely taking advantage of the recent correction to buy up ETH.

To reaffirm this outlook, the analyst said that the trends observed in the open interest of Ethereum CME futures contracts are a reliable sign.

Notably, this trend is similar to what happened with Bitcoin futures prior to the launch of a spot Bitcoin exchange-traded fund (ETF), which has analysts confident that a similar pattern will be seen with Ethereum.

Currently, Ethereum is hitting discouraging lows as sellers are persistently resisting, slowing momentum and putting a cap on bulls.

So far, $3,700 has emerged as a resistance level that traders should closely monitor. After this level was breached on June 7, the bulls did not launch a counterattack and the breach was confirmed four days later on June 11.

Ethereum price trending down on daily chart | Source: ETHUSDT on Binance, TradingView

Despite the current market conditions, the launch of an Ethereum Spot ETF could still propel the price to new highs. Analysts are predicting a possible extension to $5,000, confirming the trend and a breakout above the current flag in the first quarter of 2024.

Still, it will depend on the price action whether the bulls will take the lead. Technically, open interest indicates the cumulative sum of both open and long leveraged open interest. If buyers push the price higher, ETH could expand in the coming days and surpass $3,700 this week.

Spot Ethereum ETF optimism: Will it be a success?

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

While some analysts are bullish on Ethereum, they’re not convinced it will enjoy the same success as the spot Bitcoin ETF did when it launched. Eric Balchunas, senior ETF analyst at Bloomberg, said: Predicted A spot Ethereum ETF would be successful if it could capture just 20% of the capital flowing into Bitcoin.

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