SEC makes spot Ethereum ETF decision as ETH outflows have their say

• SEC extends spot ETH ETF decision by 45 days
• More ETH flows out of exchanges as the wait begins

The U.S. Securities and Exchange Commission has taken its first concrete step of the year on the route to either approving or rejecting an Ethereum spot ETF. This action was conveyed through a response sent by the SEC to Fidelity.

SEC responds to Fidelity’s spot Ethereum ETF application

As per a letter dated 18 January, the U.S. Securities and Exchange Commission (SEC) has decided to extend its decision-making process regarding the Fidelity spot Ethereum ETF application. The application, submitted on 17 November 2023 and opened for comments on 6 December, will now undergo an extended resolution period. This follows the SEC’s choice to extend the decision timeline by 45 days. 

Consequently, the resolution is anticipated to be around 5 March 2024. Also, Bloomberg analyst James Seyffart suggests that approval may be possible in May. Notably, BlackRock’s CEO Larry Fink is pretty confident of the value attached to a spot Ethereum ETF. He claimed so in an interview shortly after the approval of the spot Bitcoin ETF.

Ethereum remains in a downtrend 

Upon the approval of the spot Bitcoin ETF, there was no notable surge in price, with analysts attributing this to it being priced in before the announcement. Interestingly, for Ethereum, the news of the proposal submission and the subsequent decision announcement may significantly impact the price more than the actual approval.

At the time of writing, ETH was trading at around $2,400, experiencing a slight loss of less than 1% in 24 hours. Although it seems to be on a downtrend, ETH’s present value is higher than what its value was a year ago. 

Source: Trading View

An analysis of the daily timeframe chart revealed that ETH did not reach the present price level over the previous year. Additionally, the ongoing bull trend continued while showing signs of weakening. Notably, the Relative Strength Index (RSI) remained above the neutral line, indicating a bullish trend at press time. 

Observing the exchange flow

AMBCrypto’s examination of Ethereum’s exchange flow showed that the balance between inflow and outflow shifted around 14 January. Since then, there has been a consistent trend of more outflow than inflow. This suggested that a more significant amount of ETH is leaving exchanges, compared to the incoming volume.

Also, the trend implied that fewer Ethereum assets are being offered for sale recently.

Source: CryptoQuant

Read Ethereum (ETH) Price Prediction 2023-24

As of 18 January, the data highlighted that over 90,000 ETH have moved out of exchanges, further supporting the notion that market participants are withdrawing their assets from exchange platforms.