Ethereum is solid and on the rise, surpassing Bitcoin as the world’s most valuable coin. Earlier today, the price of Ethereum topped $3,900 before falling sharply below $3,800 before rebounding back to spot prices.
To explain the unexpectedly high volatility, especially as the price fell sharply from $3,900 and fell below $3,800, some analysts suggested that large sell orders from maximum extractable value (MEV) trading firm Symbolic Capital Partners could be to blame. I insist.
Ethereum is highly volatile above $3,800: a possible explanation
In a post about said Symbolic Capital Partners offloaded 6,968 ETH worth over $27 million, with an average selling price of $3,930 per minute. In particular, one of these transactions involved the simultaneous sale of 3,497 ETH along with a “high bribery fee” of 90 ETH.
The exact motivation behind this massive speculation is unclear, but their actions appear to have influenced prices and caused volatility.
At spot rates, Ethereum is up 30% from its May 2024 low. Technically, the upward trend will remain as long as the price trades above $3,700. On May 20, the price of ETH surpassed $3,300 and $3,700. These were the two major resistance levels currently supported.
As long as the price stays above $3,700, an uptrend could set the stage for a rise to the March high around $4,100.
Despite high ETH volatility, overall sentiment remains positive. An analyst for X note Over the past three weeks, open interest for Ethereum futures has grown to over $4.6 billion on several exchanges such as Binance, OKX, and even Bybit.
Open Interest is an indicator of the number of long or short leveraged positions outstanding. As the number increases, traders become confident about the coin’s prospects.
Spot ETH ETF is generating interest.
The excitement around Ethereum so far has been linked to positive progress in the approval of cash exchange-traded funds (ETFs). At the time of writing, the U.S. Securities and Exchange Commission (SEC) has been actively engaging with potential issuers. Changes have been requested specifically regarding ETH staking.
Some analysts believe the lack of a staking feature for spot Ethereum ETFs is an overall positive. The analyst said in assert If the issuer of the spot Ethereum ETF is allowed to hold the stake, yields will fall and the returns for the sole stake holder will be reduced. This ultimately makes individual staking less attractive and affects network decentralization.
Featured image from Canva, chart from TradingView