Ethereum Posts 16% Surge as Bloomberg Analysts Surprisingly Raise Approval Probability to 75%

• Ethereum ETFs could see approval as Bloomberg analysts increase their approval odds from 25% to 75%.
• Grayscale’s CEO confirms his resignation, just days before the SEC decides on spot ETFs on Ethereum.
• Ethereum could test key support levels if ETH spot ETFs are rejected.

Ethereum (ETH) price rose over 16% on Monday as Bloomberg analysts updated their odds for spot approval of the Ethereum ETF to 75%. The resignation of Grayscale’s CEO a few days before the Securities & Exchange Commission (SEC) decision on the ETFs has also added complexity to analysts’ forecasts.

Read more: Ethereum gains 5% as Vitalik Buterin responds to community criticism of Coinbase ETH ETF forecast

Market Drivers Daily Roundup: Ethereum ETF approval is now pending

Ethereum is expected to experience increased volatility this week as the market awaits the SEC’s reaction to Ethereum spot ETF applications. The SEC must decide on May 23 whether to approve or reject Van Eck’s spot application for an Ethereum ETF and Ark 21Shares’ application for an Ethereum ETF on May 24.

Ethereum is expected to experience increased volatility this week as the market awaits the SEC’s reaction to Ethereum spot ETF applications. The SEC must decide on May 23 whether to approve or reject Van Eck’s spot application for an Ethereum ETF and Ark 21Shares’ application for an Ethereum ETF on May 24.

In an interesting change of position, Bloomberg analysts Eric Balchunas and James Seyffart have increased their odds of an Ethereum ETF being approved from 25% to 75%. According to Balchunas, the SEC could “do a U-turn” due to increasing political pressure.

This comes after US presidential candidate Donald Trump made several pro-crypto statements during a campaign in early May. Many have speculated that President Joe Biden may make a pro-crypto move, also to gain support from the crypto community.

Meanwhile, in an X post, ETF Store President Nate Geraci provided insight into the SEC approval process for ETFs and how it would impact upcoming decisions. He explained that the SEC must approve both 19b-4 (changes in stock exchange rules) and S-1 (registration statements) in order for an ETF to be launched.

19b-4s is the application that national exchanges such as NASDAQ or the New York Stock Exchange (NYSE) file with the SEC to request approval to list a new product on their trading platforms. In the context of ETFs, S-1s refer to the initial registration forms that detail how a fund is managed and the price of the underlying asset is tracked.

Geraci says it’s “technically possible for the SEC to approve 19b-4s and then play slow S-1s” given their alleged lack of commitment.

However, Bloomberg analyst James Seyffart said that 19b-4 approval is only a matter of “when” and not “if” before the S-1 filings are approved. He also clarified that their approval quotas only apply to 19b-4s filings.

This follows a report from CoinDesk that exchanges have been asked to update their 19b-4s filings on an accelerated basis.

Also Read: Ethereum Falls Below $3,000 Again, Spot ETH ETF Sparks Debate in Crypto Community

Meanwhile, Grayscale CEO Michael Sonnenshein has resigned, according to a Wall Street Journal report. Peter Mintzberg, head of strategy at Goldman Sachs’ asset and wealth management division, will take over as new CEO in August.

Sonnenshein also confirmed his departure from the digital asset management company in an X post on Monday. Grayscale previously withdrew its application for a futures Ethereum ETF in early May.

With both events coming just days before the SEC’s decision on Ethereum ETF applications, many members of the crypto community have previously reduced their chances of approval. But with the latest update from Bloomberg analysts, things could be looking positive for Ethereum.

ETH Technical Analysis: Ethereum could test key support levels

Ethereum is trading at around $3,566 on Monday, up over 16% on the day. With the SEC’s decision on Van Eck’s spot ETH application due on Thursday, investors should watch out for high volatility.

The $3,029 support could prove crucial in the next few days ahead of the event. A decline below support indicates strong bearish sentiment due to expectations that the SEC will reject the application. However, recent price action sees ETH targeting the $3,730 resistance as spot Ethereum ETF expectations have turned bullish.

Read more: Week ahead: Ethereum and DeFi will be in the spotlight this week

According to QCP: “Given the apparent lack of interest in the market, the risk is to the upside as a surprise approval takes everyone by surprise and triggers a short squeeze that easily takes us back to recent highs.”

ETH/USDT 4-hour chart

A rejection of spot ETH applications could trigger a sharp decline following Monday’s fair value gap. However, ETH may not be able to sustain a decline below the $2,914-$2,852 range as it has shown strength in weathering dips over the past three months.

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