• Ethereum (ETH) is experiencing a potential short-term bullish trend as it breaks away from a recent period of sideways movement.
• Opinions among industry experts are divided, with skepticism from Nate Geraci regarding the SEC’s ability to reject spot ETH ETF applications.

Ethereum (ETH) is poised for a potential short-term bullish surge on Wednesday, breaking free from a five-day period of horizontal movement. Recent discussions in the crypto sphere have been ignited by a decline in revenue on the ETH Mainnet and anticipation surrounding the Securities & Exchange Commission’s (SEC) forthcoming decision regarding spot ETH ETFs.

As the May 23 deadline for the SEC’s verdict on VanEck’s spot ETF approaches, industry experts are voicing their opinions. Nate Geraci, President of ETF Store, expressed skepticism regarding the SEC’s ability to reject spot ETH ETF applications, citing the agency’s prior approval of an ETH futures ETF and issuers’ modifications to their applications, which removed staking options. Conversely, an X user, @Evan_ss6, speculated that the SEC might opt for denial, citing an “ongoing investigation into whether or not ETH should be classified as a security.”

However, it’s worth noting that court documents from ConsenSys disclosed that the SEC initiated investigations into a potential Ethereum security classification as early as April 2023, per the Crypto News flash report. Despite this, the SEC proceeded to greenlight ETH futures ETFs in September, signaling a complex landscape surrounding Ethereum’s regulatory status.

Ethereum (ETH) Price Action

On Wednesday, Ethereum is hovering around $2,990, aiming to reclaim the critical $3,000 price threshold. As anticipated, the short-term uptrend is unfolding, with ETH potentially encountering notable resistance levels around $3,103 and $3,161.

However, breaking through these resistance levels may prove challenging due to the subdued bullish momentum observed in the largest altcoin. The price range between $2,852 and $3,300 remains pivotal, with Ethereum likely to remain within this range in the coming days. Nevertheless, after the Securities and Exchange Commission (SEC) delivers its initial verdict on spot ETH ETFs on May 23, market uncertainty could diminish, potentially paving the way for a fresh market outlook.

Furthermore, ETH long liquidations have notably decreased and are now nearly on par with short positions. Meanwhile, open interest has seen a slight uptick to 1.97%, corroborating the short-term bullish sentiment.

Ether option traders are preparing for increased price volatility leading up to the SEC’s deadline at the end of May for spot ether ETF determinations. Wintermute OTC Trader Jake Ostrovskis noted that the market currently estimates only a 16% probability of these ETFs receiving approval by the end of May.

Additionally, Ostrovskis mentioned that implied volatility in ether options is expected to climb towards the end of the month, particularly around the period when the SEC is anticipated to announce its verdict on spot ether ETFs.