The U.S. Securities and Exchange Commission (SEC) approved the listing of an Ethereum (ETH) exchange-traded fund (ETF) on stock exchanges on May 23. Following the news, the price of ETH skyrocketed and related keywords began to dominate the cryptocurrency industry.
But Vini Barbosa, Santimento's Sun Bass Pro The chart suggests that retail traders currently dominate the Ethereum market.
In particular, Ethereum's social dominance reached a year-on-year high of 14.21%, far outperforming other cryptocurrencies in social metrics. Looking at this metric alone, it suggests that retail traders are driving the current move, with whales having opened positions earlier.
Additionally, key on-chain indicators of network activity hit one-year lows, decoupling from price and social indicators. Ethereum recorded $7.63 million in on-chain volume for the week, confirming the dominance of retail traders with relatively low trading volumes.
Retail Traders Navigate Ethereum ETF News
From another perspective, Finvold collected data from Santiment and revealed that on May 23, the keyword “Ethereum” or “ETH” dominated the social context along with “ETF,” being mentioned 563 times on social platforms and showing a 4.05% advantage over other trending keywords.
Interestingly, most media and influencers reported the SEC’s first phase approval of the Ethereum ETF, which the crowd mimicked in groups, which may have stimulated retail traders’ “fear of missing out” (FOMO) and boosted ETH prices on cryptocurrency exchanges.
However, it is important to understand that ETFs require further approval from regulators before they can begin trading: the SEC currently only approves assets for listing on NASDAQ, CBOE, and the NYSE, and not the asset issuers themselves.
ETH Price Analysis
At the time of writing, Ethereum is trading at $3,811, up 1% from its price on May 23. Additionally, ETH has seen cumulative gains of around 22% month-over-month, suggesting that institutional investors had already priced in the ETF news.
Now, ETH must be able to maintain momentum despite the decline in associated social metrics and network activity. This will be a tough task, and any weakening momentum due to retail dominance could signal a price correction before a further surge.
Investors should continue to remain cautious, avoid opening positions under FOMO, and make rational and thoughtful decisions going forward.
Disclaimer: The content of this site does not constitute investment advice. Investing is speculative and your capital is at risk when investing.
