Ethereum's changing narrative, spot ETF and altcoin beta hype back ETH rally

Ethereum ETH fell to $2,607. For the first time since May 2022, the price of ETH broke above the $2,400 mark as traders turned their attention to the possibility of an Ethereum exchange-traded fund (ETF) once a spot Bitcoin ETF is approved.

Ether's price has skyrocketed since opening at $2,343 on January 10, jumping more than 7.8% in the last 24 hours and 85% in the last 12 months to hit a year-to-date high of $2,444.

ETH was virtually the only cryptocurrency in the top 10 coins by market cap to show bullish sentiment within minutes after a misleading tweet from the US Securities and Exchange Commission (SEC) approving spot exchange-traded funds (BTC ETFs) caused a significant price hike. Bitcoin volatility.

The price of BTC dropped to $46,272. The last time Ether traded above $2,400 was on May 3, 2022, when the price settled at a high of $2,529 before falling to a low of under $1,000 on July 18, 2022, after the collapse of the Terra ecosystem.

Tokens of second-layer networks such as Mantle's MNT and Optimism's (OP) rose in price by 9% and 15%, respectively. These networks are based on Ethereum technology, but operate as independent blockchains, allowing users to transact cheaper and much faster than on the underlying blockchain.

Crypto analysts on X speculate that market participants are preparing for the approval of a spot Ethereum ETF, which will provide professional investors in the US with a tool for indirect exposure to ETH.

“Currently, interest in BTC and ETF approval has shifted somewhat, but Ethereum could also get a spot ETF,” MN Trading CEO and founder Michael van de Poppe said in a note on X.

Data from Coinglass shows that Ethereum short liquidation volumes reached $31.7 million in the last 24 hours, and as of this writing, this figure is constantly growing.

Meanwhile, the SEC's decision on all spot applications for ETFs is scheduled for January 10.

Market participants are hopeful that approval will come soon, especially after the Securities and Exchange Commission announced on Jan. 10 that it had approved the listing of securities from several asset managers.