How Will Ethereum React to the Approval of a Bitcoin ETF?

The US Securities and Exchange Commission (SEC) is coming to the end of its Bitcoin (BTC) ETF decision deadline on Jan. 10, and the market is optimistic about the outcome. This pivotal event could have far-reaching effects on the crypto market, including Ethereum (ETH), one of the top cryptocurrencies listed on the web 3.0 framework.

Investors are keen to know more about how to invest in web 3.0, which includes a list of cryptocurrencies, and the potential of web 3.0 financial services and applications. As the SEC’s decision approaches, the market is eager to see the implications of a potential approval on the web 3.0 market cap.

Ethereum ETF hopes

The potential of a Bitcoin ETF approval could create a regulatory framework that could be applicable to other crypto-based ETFs, including Ethereum. In December 2023, the SEC delayed its decision on several pending Ethereum ETF applications in the U.S. to May 2024. This includes the Hashdex Nasdaq Ethereum ETF, the Grayscale Ethereum Futures ETF, the VanEck spot Ethereum ETF, and the spot Ethereum ETF lodged by Cathie Wood’s ARK Invest and 21Shares.

These delays are part of the SEC’s process, which involves gathering public input before deciding whether these ETFs should be listed.

Ethereum-Bitcoin correlation

If the approval of a Bitcoin ETF does not become a sell-the-news event, then Ether’s price is likely to rally due to its consistent correlation with BTC’s price in recent years. Fundamentally, it means that a Bitcoin ETF approval may trigger a substantial increase in crypto exposure among traditional investors, which could lead to a surge in ETH price as the market anticipates increased demand.

Conversely, a delay or denial may result in short-term bearish pressure as the market adjusts to the setback. According to a recent Bitwise survey, only 39% of U.S.-based financial advisers believe a Bitcoin ETF will be approved this year.

Investors who want to invest in Web 3.0 may want to consider the different cryptocurrencies listed on the Web 3.0 framework. Examples of Web 3.0 applications include Metaverse, which is part of the Web 3.0 market. To get started, investors should research the Web 3.0 market cap and how to invest in Web 3.0 financial services.

Ethereum price technicals hint at correction

From a technical standpoint, ETH’s price is close to the resistance line of its ongoing ascending wedge pattern ahead of the Bitcoin ETF decision. A delay or rejection could lead to the price dropping to the wedge’s lower trendline near $1,865 by February.

The $1,865 level is in line with ETH’s 0.236 Fibonacci line and its 50-week exponential moving average (50-week EMA; the red wave).

On the other hand, if the ETF gets approved, Ethereum might not follow its rising wedge setup anymore, but instead switch to an ascending triangle reversal pattern, as shown below.

The triangle’s upside target is near $3,870 by March, an increase of 75% from current levels, and is in line with the 0.786 Fibonacci line.

Investors looking to invest in Web 3.0 might want to consider the cryptocurrencies list of Web 3.0, as well as explore the various financial services and applications examples available in the Web 3.0 market.