The cryptocurrency market received a powerful boost on May 21 as Ethereum (ETH) surged over 20% in a single day, fueled by renewed optimism around the potential approval of a spot ETH ETF. Bitcoin (BTC) followed suit with an 8% gain, breaking a nearly two-month slump across digital assets. At its peak, ETH surpassed $3,800, while BTC briefly climbed above $72,000 before both tokens experienced minor pullbacks.
This rally was triggered by a post from Bloomberg analysts suggesting a major shift in the U.S. Securities and Exchange Commission’s (SEC) stance toward spot Ethereum ETFs. The news sent shockwaves through the market, reigniting investor confidence and sparking broad gains across altcoins.
Why the Sudden Change in ETF Approval Odds?
Market sentiment had previously been pessimistic ahead of the May 23 decision deadline for VanEck’s spot ETH ETF application. However, geopolitical dynamics may now be influencing regulatory decisions. With the U.S. presidential election approaching at the end of 2025, both political parties are under pressure to appeal to key voter blocs—including crypto investors.
While Republican candidate Donald Trump has positioned himself as pro-crypto—accepting cryptocurrency donations and advocating for favorable policies—President Biden’s administration has appeared less engaged in the space. Analysts speculate that Democratic leaders may be urging the SEC to approve a positive crypto development, such as an ETH ETF, to gain favor with this growing demographic.
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Early Signals That Preceded the ETH Rally
Despite the sudden price surge, there were clear warning signs before the breakout:
- Institutional positioning: On May 19, large traders on Bitfinex significantly increased their long leverage on the ETH/BTC pair—the largest such move in two years and the third major accumulation since March 11. This signaled strong institutional conviction ahead of the rally.
- Technical bullish divergence: On the 12-hour chart, the MACD indicator showed multiple instances of bullish divergence before ETH broke out of its descending trendline—a classic sign of weakening downward momentum and potential reversal.
These indicators were highlighted in advance within the GT Radar community, allowing attentive members to position themselves ahead of the move.
Should You Buy ETH Now?
While the momentum is strong, we advise caution for new investors considering entering at current levels.
First, ETH is now within 7% of its all-time high of $4,100 set in March. This limited upside potential reduces reward-to-risk ratios for short-term traders. Second, major players on Bitfinex have already begun taking profits after the surge. Third, much of the positive sentiment around a potential ETF approval has already been priced into the market.
VanEck’s spot ETH ETF decision is due on May 23, followed by Ark Invest and 21Shares’ application on May 24. If approved, further gains are likely. But if rejected or delayed, a sharp correction could follow.
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Recommended Strategy:
- Futures traders: Avoid chasing the rally. Wait for clarity post-decision.
- Spot investors: Consider establishing a partial position now and allocating additional funds after the SEC decision—regardless of outcome—to average entry costs and reduce emotional trading.
Given the broader bullish shift, GT Radar will adjust its strategy this week from conservative to aggressive mode.
Performance Review: Binance Copy Trading Portfolios
GTRadar – BULL
GTRadar – Balanced
Over the past seven days, the GTRadar – BULL portfolio returned +11.11%, outperforming the Balanced portfolio’s +5.19%. Over 30 days, returns stand at +7.53% and +1.41%, respectively. The outperformance was largely driven by exposure to ETH during the May 21 rally.
- BULL Portfolio: Currently holds approximately 150% net long exposure (out of a maximum 300%).
- Balanced Portfolio: Maintains around 80% total exposure (out of 300%), with ETH contributing the highest returns.
Both portfolios are scheduled for rebalancing by Friday, May 24, increasing allocation weights from conservative to aggressive settings. Users looking to increase their copy trading amounts should act before this adjustment.
Pro Tip: Traders who frequently switch strategies often underperform those who maintain consistent follow-through. Short-term drawdowns are normal—even optimal—for long-term growth. Frequent entry and exit decisions erode compounding returns.
Emerging Market Opportunities
Ethereum & Solana Ecosystem Plays
With ETH ETF speculation heating up, related ecosystem tokens have rallied sharply:
- Layer 2 solutions like Arbitrum (ARB) and Optimism (OP) gained over 20%.
- DeFi leaders such as Lido (LDO) rose nearly 40% in two days.
If approved, a spot ETH ETF could reinvigorate interest in Ethereum-based projects after months of dormancy.
Moreover, market attention may soon shift to the next likely ETF candidate—Solana (SOL). Just as BTC ETF approval spotlighted ETH, Solana now stands as the most talked-about contender for future regulatory greenlights.
AI Tokens Ahead of NVIDIA Earnings
NVIDIA’s quarterly earnings report is due tonight. Wall Street expects strong results, especially following OpenAI’s release of GPT-4o, which reignited enthusiasm for artificial intelligence.
Although many AI-themed crypto projects lack mature products, their prices are highly sensitive to macro AI sentiment. A positive NVIDIA report could trigger significant volatility in AI-related tokens like RNDR, TAO, and FET.
Key Market Developments
VanEck’s Spot ETH ETF Listed on DTCC
VanEck’s proposed spot Ethereum ETF has been added to the Depository Trust & Clearing Corporation (DTCC) ETF list under the ticker ETHV. While this does not confirm approval—it’s merely a procedural step—it strengthens expectations that SEC clearance may be imminent.
Record Open Interest in ETH Futures
ETH futures open interest has hit a record $14.6 billion, reflecting surging institutional demand amid rising approval odds. Bloomberg analysts have increased their probability estimate from 25% to 75%, underscoring growing confidence in a favorable ruling.
VC-Backed Tokens Under Pressure
Dragonfly Capital partners noted that many "VC coins" are trading poorly due to factors like early investor dumping, retail disinterest, and low float preventing price discovery. This highlights a structural shift—investors are favoring transparent models over inflated valuations.
Shifting Market Narratives
According to Kaito’s social sentiment analysis, AI remains dominant in investor discussions, while BRC-20 tokens are fading from focus. The methodology tracks Twitter mentions relative to overall crypto discourse, offering a quantifiable view of narrative dominance.
The Reality Behind KOL Shilling
A recent study found that while KOL tweets generate short-term price spikes, they often lead to losses over time. On average, blindly following a $1,000 KOL recommendation results in a $79 loss within one month—highlighting the risks of influencer-driven trading.
Frequently Asked Questions
Q: What happens to ETH if the spot ETF is rejected?
A: A rejection would likely trigger a short-term sell-off, potentially pushing ETH below $3,500. However, given ongoing political support and institutional interest, another application cycle would likely follow.
Q: Is it too late to invest in Ethereum?
A: Not necessarily. Even if near-term gains are limited, long-term holders benefit from ecosystem growth and potential staking yields. Dollar-cost averaging remains a prudent strategy.
Q: Which altcoins could benefit most from an ETH ETF approval?
A: Layer 2 protocols (ARB, OP), DeFi leaders (UNI, LDO), and liquid staking tokens (STETH) are prime beneficiaries. Solana-based tokens may also gain traction as the next ETF candidate.
Q: How do I protect my portfolio during high-volatility events?
A: Use stop-loss orders for leveraged positions, maintain diversified exposure, and avoid emotional reactions to news cycles.
Q: Why did futures open interest rise so sharply?
A: Institutional traders are positioning heavily ahead of the SEC decision—betting on either a breakout or breakdown based on regulatory outcomes.
Q: Should I follow KOLs for trading ideas?
A: Exercise caution. While some provide valuable insights, many promote tokens for personal gain. Always conduct independent research before investing.
Disclaimer: This article does not constitute financial advice. All data comes from public sources and historical performance does not guarantee future results.