Ethereum is under tremendous selling pressure, falling more than 30% from its March 2024 high. With prices recently falling below $3,000 and sellers doubling down, there may be no reprieve for optimistic buyers in the coming sessions.
Analysts expect one more “failure” to $2,700.
Let’s look at one analyst, X. note The coin is still in a downtrend and is moving inside a falling wedge. Traders predict that ETH will continue to fall below the immediate support level.
In the post, the trader predicted a potential “cleanse” of ETH, with the coin likely to fall below $2,700. The analyst added that despite prevailing fears, the overall structure of Ethereum price action has not changed.
The arrangement of Ethereum candlesticks on the daily chart shows that Ethereum price is within a bearish breakout formation. After steep losses in mid-April, buyers are yet to liquidate their losses.
Therefore, unless there is strong pressure above $3,300 and the wedge declines, the odds of the sellers continuing to apply pressure remain high. At the current formation, Ethereum enjoys strong support at $2,800. If “weakness” occurs, as the analyst put it, ETH could fall below $2,700 towards two of the immediate support levels: $2,600 and $2,200.
Darkening outlook for spot Ethereum ETFs
Adding weight to the decline, there is a growing possibility that the U.S. Securities and Exchange Commission (SEC) will refuse to approve a spot Ethereum exchange-traded fund (ETF) this month. This speculation comes from analysts who point out that the committee could potentially classify Ethereum as a security, hindering ETF approval.
X’s financial lawyer Confirmed The US SEC is considering classifying ETH as a security in its upcoming spot ETF decision. Unlike Bitcoin, where spot and futures ETFs have been approved without such scrutiny, ETH faces these additional hurdles.
If a committee led by Gary Gensler were to consider ETH security, there would be serious consequences. Although every spot ETF application can be rejected, there are many more. Grayscale’s Ethereum Trust, ETHE, states as part of its terms of use that if the U.S. SEC classifies ETH as a security, all ETHE will liquidatedThe trust has ended.
In late April, Consensys, led by Ethereum co-founder Joseph Lubin, said it had sued the US SEC to protect the broader cryptocurrency ecosystem. ConsenSys said that by threatening to classify ETH as a security, regulators would “jeopardize the United States’ ability to use Ethereum and similar blockchain technologies.”
Featured image from Canva, chart from TradingView