SEC’s XRP Reversal Signals Crypto Industry Optimism Ahead of SOL Futures ETF Launch
The recent reversal by the U.S. Securities and Exchange Commission (SEC) regarding XRP has sparked optimism within the cryptocurrency industry, coinciding with the upcoming debut of Solana (SOL) futures ETFs. Meanwhile, Ethereum (ETH) faces price pressure despite record-high futures open interest.
Ethereum Price Struggles Despite Record Futures Interest
Ether (ETH) experienced a 6% price drop between March 19 and March 21, failing to surpass the critical $2,050 resistance level. Since February 21, ETH has declined by 28%, significantly underperforming the broader crypto market, which fell by 14% during the same period.
Despite these price challenges, Ether futures open interest reached an all-time high of 10.23 million ETH on March 21, marking a 15% increase over two weeks. Binance, Gate.io, and Bitget collectively dominate 51% of the ETH futures market, while the Chicago Mercantile Exchange (CME) holds a 9% share.
Reduced Demand for Leveraged ETH Long Positions
Despite the rise in open interest, demand for leveraged long positions in ETH futures has weakened. The annualized premium for ETH monthly futures contracts dropped below 4% on March 21, down from 5% two weeks earlier. This decline indicates reduced incentives for traders to engage in “cash and carry” strategies, reflecting cautious market sentiment.
ETF Outflows and Declining Network Fees Pressure ETH
Ether’s price decline is partly attributed to weak demand for U.S.-based Ether ETFs, which saw net outflows of $307 million over two weeks ending March 20. Additionally, macroeconomic concerns, including recession risks, inflationary pressures, and global tariff conflicts, have dampened investor confidence.
Ethereum’s network revenue has also sharply declined, with the 7-day base layer revenue dropping to $605,000 on March 17 from $2.5 million two weeks prior. Analysts suggest that Ethereum’s successful transition to proof-of-stake and increased scalability through layer-2 solutions have inadvertently limited ETH price growth by reducing transaction fees and validator rewards.
Quick Summary and Key Points
- SEC’s XRP reversal boosts crypto industry optimism ahead of SOL futures ETF launch.
- ETH price down 28% since February despite record-high futures open interest.
- Reduced leveraged long demand indicates cautious market sentiment.
- ETF outflows and declining Ethereum network fees contribute to ETH price pressure.
- Macroeconomic uncertainties further dampen investor confidence.
This article is for general information purposes only and should not be considered legal or investment advice. The views expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.
