In recent weeks, Ethereum has not been immune to the broader crypto market consolidation, as its price fell significantly from $4,100 to $2,736, marking a loss of 33%. However, on February 12th, there was a notable shift as Ethereum’s price saw a considerable inflow, reaching $2,730, and recording an intraday gain of 5.5%. This uptick was not in line with the general market trend, and industry insiders have attributed this increase to 21Shares filing a proposal with the SEC to incorporate Ethereum staking within its Core Ethereum ETF.
This proposal, if accepted, could be a game-changer for Ethereum and its holders. 21Shares, a crypto investment firm, wishes to introduce a yield-generating component to the ETF structure, which could make Ethereum-based investment products more appealing to institutional investors. In effect, this could increase the adoption of Ethereum and introduce a new demand pressure for its native cryptocurrency, ETH.
The proposal was filed under the Cboe BZX Rule 14.11(e)(4), which would allow the Ether held by the Trust to be staked. This development could potentially set the stage for future Ethereum ETFs, making staking rewards a norm in crypto-backed investment products.
The Ethereum price is still 18% short from a major support retest. On February 12th, with an intraday gain of over 5%, the ETH price tested the breached $2,800 support as potential resistance. If sellers continue to defend this level successfully, Ethereum could see a further 18% drop and retest the support trendline around $2,300.
However, the current uptrend in Ethereum’s price is being driven by a support trendline that has remained intact since June 2022. If this dynamic support continues to hold, Ethereum could continue its current upward trajectory. In the short term, the immediate resistance levels have been identified at $2,800 and $3,000, as per daily chart analysis.
The proposal by 21Shares is a significant development in the crypto sector. While it remains to be seen whether the proposal is approved, the mere possibility of staking within an Ethereum ETF has contributed to a bullish momentum for Ethereum’s price. As the market continues to watch this space, it will be interesting to see how this plays out and what impact it will have on Ethereum and the broader crypto market.
