Ethereum Resumes Sideways Movement as Grayscale Files Withdrawal of Ethereum Futures ETF Application with SEC

• Grayscale has withdrawn its 19b-4 application for an Ethereum futures ETF.
• SEC Chairman Gensler declared that several crypto assets are securities as he waives the question of classification of ETH.
• Ethereum could maintain a horizontal movement in the coming weeks.

Ethereum is hinting at resuming a sideways move on Tuesday after seeing inflows for the first time in seven weeks. Grayscale withdrew its application for an Ethereum futures ETF, and Securities & Exchange Commission (SEC) Chairman Gary Gensler also called out most crypto asset holdings following a Wells advisory for companies linked to ETH.

Learn more: Ethereum Traders Show Uncertainty, SEC Delays Decision on Invesco’s ETH ETF App

Daily Market Players: ETH Inflows, Whale Transfers, SEC Chairman

Investor uncertainty regarding Ethereum prices is increasing despite recent updates regarding the largest altcoin. Here are the main players in the market:

• Grayscale withdrew its 19b-4 application for an Ethereum futures ETF in a recent filing on Tuesday. The asset manager initially filed for an Ethereum futures ETF on September 19, but faced several delays from the SEC, which was due to rule on May 30.

  Bloomberg analyst James Seyffart earlier said that Grayscale’s application for an Ethereum futures ETF was a Trojan horse to force the SEC to approve its application for an Ethereum spot ETF. The idea is that approving a futures ETF would mean that the SEC recognizes that ETH is a commodity and, therefore, would have minimal reason not to approve its spot ETF version.

  However, with Grayscale’s application withdrawn just weeks before the SEC’s decision, Seyffart expressed confusion as to why the asset manager would make this decision. The SEC is expected to rule on Van Eck’s Ethereum ETF spot application on May 23, with decisions on other applications expected later.

Read also : Ethereum May See Brief Rally Despite Michael Saylor’s ETH ETF Hit

• In an interview on CNBC Squawk Box on Tuesday, SEC Chairman Gensler said that most crypto assets are securities “under the law of the land as interpreted by the United States Supreme Court.” This response comes after he was asked about his agency’s recent action to file a Wells notice against Robinhood Crypto on Monday.

  He further said that investors were not receiving “required disclosures” about these crypto assets. Gensler appeared to avoid the question when asked if he considered Ethereum a security or a commodity and, ultimately, the possibility of a spot ETH ETF.

  “All I would say is that, for me, the fundamental question is how do we ensure that the American investor is protected?” Gensler said. “Right now, they’re not getting the required or necessary information, and the intermediaries at the center of this rather centralized market are generally conflicted and doing things that we would never allow the New York Stock Exchange to do. “

  Fortune reported earlier that the SEC may aim to classify Ethereum as a security after subpoenaing several companies for facilitating the buying and selling of Ethereum. Ethereum infrastructure provider Consensys also announced that it had received a Wells notice from the regulator.

  In a court filing, Consensys revealed that the SEC had secretly deemed ETH as a security through investigative actions against several companies.

• Institutional Ethereum investors appear to be turning bullish for the first time in nearly two months. After experiencing seven weeks of consistent outflows, ETH “ended its 7-week outflow period,” garnering $30 million in inflows, according to CoinShares data.
• Following the recent ETH impasse, FTX/Alameda Research addresses transferred approximately 2,000 ETH worth $6.17 million to Coinbase, according to PeckShieldAlert. FTX/Alameda Research addresses have already been marked to occasionally transfer ETH to exchanges moments before a market downturn.
• Over the past 24 hours, hackers linked to the Poloniex exchange and the KronosResearch hack transferred 1,100 ETH and 1,000 ETH to the US-sanctioned mixing protocol Tornado Cash, respectively, according to data from PeckShieldAlert .

ETH technical analysis: ETH could start a sideways movement again

Ethereum looks to resume a sideways move on Tuesday after failing to stay above the $3,161 resistance.

Learn more: Ethereum to emerge from bearish movement, ETH ETFs unlikely in 2024

ETH/USDT 4-hour chart

ETH’s current price action suggests that the popular altcoin would likely follow a horizontal – but more short-oriented – pattern amid uncertainty among traders.

This is confirmed by ETH liquidation data, which, after slowing down, still sees long liquidations making up the bulk of the digital asset’s total liquidations. ETH long liquidations total $34.56 million, while short sales total just $8.25 million, according to Coinglass data.

Data from Coinglass also shows that Ethereum’s open interest has remained relatively stable over the past four days, further strengthening the sideways thesis. If ETH drops below the $3,029 support, a brief downtrend could begin.

However, the key range of $2,852 to $3,300 is also proving strong as ETH may not see any sustained movement outside in the coming weeks unless the price of Bitcoin sees a significant peak.

Ethereum is trading around $3,067, down 0.3% on the day.

Ethereum FAQ

Ethereum is a decentralized open source blockchain with smart contract functionality. Serving as the backbone network for the cryptocurrency Ether (ETH), it is the second largest crypto and largest altcoin by market capitalization. The Ethereum network is designed for scalability, programmability, security, and decentralization, attributes that make it popular among developers.

Ethereum uses decentralized blockchain technology, where developers can create and deploy applications independent of the central authority. To facilitate this, the network has a programming language that helps users create self-executing smart contracts. A smart contract is essentially code that can be verified and enables transactions between users.

Staking is a process by which investors grow their portfolio by locking up their assets for a specified period of time instead of selling them. It is used by most blockchains, especially those that use the proof-of-stake (PoS) mechanism, with users earning rewards as an incentive to stake their tokens. For most long-term cryptocurrency holders, staking is a strategy to earn passive income from your assets, putting them to work in exchange for generating rewards.

Ethereum moved from a proof-of-work (PoW) mechanism to a proof-of-stake (PoS) mechanism in an event dubbed “The Merge”. The transformation came as the network wanted to increase security, reduce energy consumption by 99.95% and implement new scalability solutions with a possible threshold of 100,000 transactions per second. With PoS, there are fewer barriers to entry for miners given the reduction in energy demand.

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