Ethereum remains under immense selling pressure, shaving more than 30% off March 2024 highs. With prices recently falling below $3,000 and sellers having doubled, there could be no respite for bullish buyers in future sessions.
Analyst expects another ‘collapse’ to $2,700
Taking X, an analyst Remarks that the coin is still bearish and moving inside a descending wedge. The trader predicts that ETH will continue to fall below immediate support levels.
In one post, the trader predicts a potential ETH “collapse” that would likely see the coin fall below $2,700. The analyst added that despite the prevailing fear, the overall structure of Ethereum’s price action remains unchanged.
The layout of Ethereum candlesticks in the daily chart shows that Ethereum prices are in a bearish breakout formation. After the heavy losses in mid-April, buyers have not yet made up for their losses.
Therefore, unless there is a strong push above $3,300 and a falling wedge, the chances of sellers continuing to push remain high. In its current form, Ethereum enjoys strong support at $2,800. In the event of a “washout,” as the analyst puts it, ETH could fall below $2,700, towards $2,600 and $2,200, two of the immediate support levels.
The outlook for Spot Ethereum ETFs to decline
Adding fuel to the bearish fire are the growing chances that the U.S. Securities and Exchange Commission (SEC) will reject approval of Ethereum spot exchange-traded funds (ETFs) this month. This speculation comes from analysts pointing out that the commission could classify Ethereum as a security, derailing the ETF’s approval.
A financial lawyer out of confirmed that the US SEC is considering classifying ETH as a security in its upcoming spot ETF rulings. Unlike Bitcoin, whose spot and futures ETFs were approved without such review, ETH faces this additional hurdle.
If the commission led by Gary Gensler deemed ETH safe, there would be dire consequences. Even if all applications for spot ETFs could be denied, there would be more. Under the terms and conditions of Grayscale’s Ethereum Trusts, ETHE, if the US SEC classifies ETH as a security, all ETHE will be liquidand the trust was closed.
In late April, Consensys, led by Ethereum co-founder Joseph Lubin, said it pursue the US SEC to protect the broader crypto ecosystem. By threatening to classify ETH as a security, ConsenSys said the regulator would “jeopardize the United States’ ability to use Ethereum and similar blockchain technology.”
Featured image from Canva, chart from TradingView
