Ether has been struggling to break through the $3,600 level over the past three days, despite its impressive 58.8% surge since February. While uncertainty regarding the approval of a spot Ether exchange-traded fund (ETF) in the U.S. may be limiting upside potential, the surge in Ether futures open interest suggests strong demand from institutional investors.

The decision on a spot Ether ETF in May holds significant importance for Ether's price trajectory. The recent indictment by the U.S. Justice Department against KuCoin has sparked debates. While some view it negatively due to tighter regulatory conditions, others see it as a positive factor that could enhance the chances of a spot Ether ETF approval by May 25.

A complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) against KuCoin highlights Bitcoin, Ether, and Litecoin as commodities, challenging the SEC's stance on Ether's security classification.

BlackRock CEO Larry Fink suggested that listing an Ether ETF could still be possible even if Ether is classified as a security. However, Bloomberg senior ETF analyst James Seyffart predicts a denial in May, citing the CFTC's recognition of Ether as a commodity since at least February 2021.

The growth of the Ether futures market, particularly on platforms like Binance and Bybit, indicates increased participation from hedge funds and large asset managers. However, the recent surge in Ether futures open interest should not be hastily interpreted as a bullish signal, as it could be influenced by various factors.

Analysis of Ether perpetual contracts reveals moderate optimism, with a funding rate of 0.04% indicating moderate bullish sentiment among traders. Additionally, data from the Ether options market suggests balanced pricing between call and put options, indicating a neutral market stance. However, compared to previous data, traders seem less optimistic about Ether surpassing the $3,800 mark.