Ethereum is firm, trending higher, and outperforming the world’s most valuable coin, Bitcoin. Earlier today, Ethereum prices broke $3,900 before retracing sharply below $3,800 and bouncing back to spot rates.
In an attempt to explain the unexpectedly high volatility, especially with prices rapidly dropping from $3,900 and sinking below $3,800, some analysts claim that a large sell order by a Maximum Extractable Value (MEV) trading firm, Symbolic Capital Partners, might be responsible.
Ethereum Is Volatile Above $3,800: Possible Explanation
In a post on X, one crypto journalist, citing another source, said Symbolic Capital Partners offloaded 6,968 ETH, worth over $27 million, with an average selling price of $3,930 in one minute. Notably, one of these transactions involved selling 3,497 ETH simultaneously, with a “high bribe fee” of 90 ETH.
While the exact motive behind this bulk dump remains unclear, their action seemed to have impacted prices, causing volatility.
At spot rates, Ethereum is up 30% from May 2024 lows. Technically, the uptrend remains as long as prices are trading above $3,700. On May 20, ETH prices broke above $3,300 and $3,700. These were two key resistance levels that are now supported.
As long as prices trend above $3,700, bulls might have a foundation for another leg up, taking them to March highs of around $4,100.
Even with ETH volatility being high, overall sentiment remains positive. One analyst on X notes that over the past three weeks, open interest in Ethereum futures across multiple exchanges, like Binance, OKX, and even Bybit, rose to over $4.6 billion.
Open interest is a metric that shows the number of open leveraged positions, long or short. When the number increases, traders are confident in the coin’s prospects.
Spot ETH ETF Fueling Interest
So far, the excitement about Ethereum is related to the positive progress in approving spot exchange-traded funds (ETFs). When writing, the United States Securities and Exchange Commission (SEC) has been actively communicating with potential issuers. Changes have been requested, particularly concerning ETH staking.
Some analysts believe the lack of staking capabilities for spot Ethereum ETFs is positive overall. In a post on X, the analyst argued that if spot Ethereum ETF issuers are allowed to stake, yields will drop, reducing returns for solo stakers. This, in turn, will make individual staking less attractive, impacting network decentralization.