Ethereum (ETH) has recently experienced a surge in spot inflows, indicating a resurgence in investor interest in the popular altcoin.
This spike coincides with the filing of an application by the Chicago Board Options Exchange (CBOE) for a spot-staked Ethereum exchange-traded fund (ETF) on behalf of 21Shares. The growing bullish sentiment surrounding Ethereum suggests a potential upward trend in the near future.
The application submitted to the US Securities and Exchange Commission (SEC) on February 12 aims to list a spot-staked Ethereum ETF managed by 21Shares. This proposed fund would allow investors to stake their Ethereum holdings, providing them with the opportunity to earn passive income while holding the asset.
Staking involves locking up ETH coins to support the Ethereum network and generate rewards. Compared to traditional ETH ETFs, a staked version offers investors additional opportunities for yield.
Bloomberg ETF analyst James Seyffart expressed optimism about the application's approval while acknowledging the regulatory uncertainties. Following this news, the price of ETH surged by 12%, reaching an intraday high of $2,790 from a low of $2,565 as spot inflows increased significantly.
When an asset experiences spot inflows, it indicates a rise in investor demand for the asset, signaling a preference for direct purchases over derivatives or futures contracts.
The weighted sentiment metric for ETH has turned positive for the first time since February 5, reflecting a shift in sentiment towards the altcoin and suggesting a bullish outlook. With traders eyeing a price target of $2,811 and potentially beyond, ETH's value could continue to rise supported by increasing spot inflows and positive sentiment.
Should ETH maintain its momentum and break through the $2,811 resistance level, a rally towards $3,321 could be on the horizon. However, profit-taking by ETH holders could lead to a drop below $2,500 in the short term.
In conclusion, the recent developments around Ethereum, including the potential approval of the spot-staked ETF and the positive market sentiment, point towards a promising outlook for the altcoin in the coming days.