One trader said ether’s sell-off on positive news is typical “buy the rumors, sell the facts” behavior.
Bitcoin (BTC) and ether (ETH) prices fell in the past 24 hours even as several ether exchange-traded funds (ETFs) were approved for listing on U.S. exchanges.
Ether has dropped 4% since the approval, CoinGecko data shows. It had risen 20% over the course of a week amid indications of pending approval and updated odds of the ETFs getting approved. The broad-based CoinDesk 20, a liquid index that tracks the biggest tokens, fell 4.5% over 24 hours and the crypto market cap lost 2.9% to $2.5 trillion.
“Ethereum’s sell-off on positive news is a typical “buy the rumors, sell the facts” reaction of speculators,” Alex Kuptsikevich, a senior market analyst at FxPro, said in an email to CoinDesk. “We shouldn’t be surprised if the price pulls back to the $3000 area again, returning to an important consolidation area. From these levels, large institutional investors can start building a position in ETFs.
“We saw the same in January after the approval of the Bitcoin ETF, which took 19% off its price in the following two weeks before there was a spectacular reversal,” he said.
The U.S. Securities and Exchange Commission (SEC) on Thursday approved key regulatory filings tied to ether ETFs, a historic milestone for the second-largest cryptocurrency. They are not, however, cleared to trade. Although the SEC approved the 19B-4 form that allows for the offering and listing of ETFs, it must still green light the funds’ S-1 filings before investors can buy them.
The regulator approved documents for eight ETFs – from VanEck, Fidelity, Franklin, Grayscale, Bitwise, ARK Invest 21Shares, Invesco Galaxy and BlackRock – for listing on the Nasdaq, NYSE Arca, and Cboe BZX exchanges.
If the ETFs are approved for trading, a significant influx of institutional capital is likely. Standard Chartered predicted inflows of as much as $45 billion in the first 12 months.
Some traders say they expect ether to rally over 60% in the coming months, with a marked increase in futures and spot buying demand for the token in the past week.