Ethereum (ETH) is showing surprising strength, up 2% on Monday. Yet, it now stands at a new test as the SEC delays its verdict on allowing staking in spot Ether ETFs. The price is getting close to a major descending trendline resistance, and analysts are expecting it to receive a major boost following approval for staking in 2025. This advance comes as the entire meme coin market had been experiencing a slump with an overall market cap noted down by 4.8%. The SEC's postponement concerns Grayscale's application to permit staking in its spot Ether ETF products, specifically the Grayscale Ethereum Trust (ETHE) and the Grayscale mini Ethereum Trust (ETH). That decision is now awaiting the anticipated return of incoming Chair Paul Atkins.
While the delay certainly introduces uncertainty into the market, a multitude of technical indicators as well point to a potential bullish move for Ethereum. During the Friday panic, the cryptocurrency rebounded hard off of $1,522 support. Now, it’s approaching a major descending trendline resistance that has capped advances since March 25. The Relative Strength Index (RSI) is heading in the direction of neutral territory. At the same time, the Stochastic Oscillator (Stoch) approaches neutrality, indicating a possible reversal of momentum. On the contrary, Ethereum might face rejection at this resistance, extending its consolidation phase.
ETF Decision Delayed
The Securities and Exchange Commission (SEC) further postponed its decision on Grayscale’s application. This application is looking for approval to add staking to its on-location Ether ETF products. This delay was the primary impetus for Grayscale Ethereum Trust (ETHE) and the Grayscale mini Ethereum Trust (ETH). Of the trusts, both are seriously looking forward to getting approval for their staking capabilities. The SEC’s final decision now rests on the expected return of incoming Chair Paul Atkins.
The official notice from DOT does not even attempt to justify the need for such serious cuts to civil rights enforcement.
“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act, designates June 1, 2025, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change,” - The notice states.
Bloomberg’s James Seyffart and other ETF watchers expect the SEC to sign off on staking in these funds. They estimate this will occur in late 2025. This sense of expectation has ignited a wave of speculation and perhaps unwarranted cautious optimism among Ethereum proponents.
Market Impact and Analysis
This possible approval of staking in ETH ETFs is viewed positively as one of the larger catalysts for the cryptocurrency’s price. Analysts from Standard Chartered and Sygnum suggest that staking could attract substantial inflows into ETH ETFs, potentially triggering a rally. At the moment, after a two-month period of consistent ETH ETF outflows.
Even so, the delay throws a fair amount of uncertainty into the market, despite short-term technical indicators pointing to a potentially bullish move for Ethereum. The previous support level for Ethereum was around $1,522, which ETH rallied from just last Friday. Currently, it’s testing a descending trendline resistance that has held since March 25. The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are both aiming for their neutral levels, indicating a possible shift in momentum. Ethereum runs the risk of being rejected at this heavy resistance, keeping it stuck in consolidation for longer.
Though the price action on Monday was encouraging, Ethereum is still vulnerable to that market correction and regulatory headwinds. In conclusion, traders will want to watch the descending trendline resistance, as well as the SEC’s upcoming announcements on ETH ETFs.
Liquidation Data and Meme Coin Downturn
According to recent data from Coinglass, Ethereum (ETH) saw $77.86 million in ETH futures liquidations over the last 24 hours. Of the $77.85 million in total liquidations, long liquidations dominated, making up 43.16 million, compared to short liquidations of 34.69 million. That reflects a relatively new and volatile market environment characterized by sharp price swings.
On Monday, the entire meme coin market suffered a major crash. Its fleet valuation decreased by 4.8%, reducing it to $49.25 billion. The overall market trend underscores just how speculative the cryptomarket is, and at its very essence. More fundamentally, it tempers the cheers by demonstrating how quickly investor sentiment can change.
