Bitcoin (BTC) encountered significant resistance at the crucial $53,000 level on Tuesday, indicating that the primary cryptocurrency is likely to continue consolidating before making its next significant move.
After a relatively quiet three-day weekend in the U.S., Bitcoin surged from $51,600 to nearly $53,000 on Tuesday morning before facing selling pressure that pushed prices down to as low as $50,700. As of writing, Bitcoin is trading at $51,260, down 1.15% over the past 24 hours.
Bitcoin’s recent sell-off mirrors previous price action observed on Thursday and Friday, where intraday rallies above $52,500 were short-lived. Zooming out, Bitcoin has been trading within the range of $51,000 to $52,500 over the past week.
Meanwhile, Ether (ETH), the second-largest cryptocurrency by market capitalization, experienced a similar fate, dropping to $2,900 after briefly surpassing $3,000 for the first time since April 2022.
Ether reached $3,000 earlier on Tuesday amid speculation surrounding the potential approval of spot Ether exchange-traded funds (ETFs) in the U.S. It peaked at $3,003.40 before retracing slightly, currently trading at $2,931, up 1% in the past 24 hours, 14% over the week, and 30% year-to-date.
Attention has shifted to the possibility of a spot Ether ETF approval in the wake of successful launches of spot Bitcoin ETFs in January. BlackRock, the world’s largest asset manager, filed for the iShares Ethereum Trust in November. The proposed ETF, named “iShares Ethereum Trust,” aims to provide investors with exposure to Ethereum’s price movements through traditional stock exchange channels.
Similarly, Fidelity’s application for its own Ethereum fund was also delayed, as indicated in a filing last week. Also in October, Grayscale Investments, in partnership with NYSE Arca, submitted its own application to the SEC seeking approval to transform the Grayscale Ethereum Trust (ETHE) into a spot Ethereum exchange-traded fund (ETF).
Bloomberg ETF analyst Eric Balchunas suggested a 70% likelihood of approval by May 23, the final deadline for the Securities and Exchange Commission (SEC) to rule on a spot Ether ETF application. However, opinions are divided, with some, like TD Cowen, believing approval is unlikely in the near term.
SEC Chair Gary Gensler has made it clear that the agency’s decision on bitcoin ETFs is specific to bitcoin and should not be interpreted as a broader acceptance of other cryptocurrency products. During a media briefing, Gensler said, “As I said two weeks ago, that which we did with regard to bitcoin exchange traded products is cabined to this one commodity non-security and shouldn’t be read to be anything other than that.”
However, previous statements by former SEC officials suggest that Ethereum’s decentralized nature may work in its favor.
