Key Points
- Ethereum’s price charts indicate a potential bearish trend for April and May.
- Despite bleak odds for an Ethereum ETF approval, certain on-chain metrics show bullish investors.
Ethereum is showing signs of a possible bearish trend in its pricing for the upcoming months of April and May.
The chances of approval for an Ethereum ETF (Exchange-Traded Fund) are quite slim, further contributing to this bearish outlook.
Ethereum ETF Speculation
Crypto analyst Daan Crypto has outlined potential scenarios revolving around the speculation of an Ethereum ETF.
Eric Balchunas, a senior ETF analyst at Bloomberg, has stated that the odds for an Ethereum ETF approval stand at a mere 25%.
As the deadline for this approval approaches in May, a negative result could potentially push Ethereum prices further down.
The market structure for Ethereum over a 12-hour period remains bullish, with Ethereum setting a higher low at $3056 on March 20th.
However, a bearish chart pattern has developed which could potentially see prices drop to $2800.
If Ethereum were to drop below $3056, swing traders may need to shift their bias towards selling, as technical indicators are increasingly pointing towards a bearish trend.
Market Indicators
Market indicators, such as the RSI (Relative Strength Index) and the CMF (Chaikin Money Flow), show a bearish trend.
Despite this, the momentum and capital flow on the 12-hour chart are not significantly bearish.
Bulls are hopeful that the bearish chart pattern will not complete, which would result in a drop to the $2.6k-$2.8k region.
In March, Ethereum faced a rejection at $4.1k, and the estimated leverage ratio (ELR) began to fall.
After this pullback, the ELR began to trend higher, indicating that the open interest is rising or that the reserve is trending downward.
However, a rising open interest was not evident based on data from the past two weeks.
The recent losses in Ethereum have seen the ratio decline slightly, indicating that speculators are starting to unwind their leverage positions due to market adversity.
An analysis of the Ethereum exchange reserve shows a downtrend since mid-March, suggesting that holders have likely taken profits and the wave of selling has begun to lighten.
The Coinbase Premium Index, which reflects the percentage difference between Ethereum prices on Binance and Coinbase on the USDT (Tether) pair, has been trending higher over the past two weeks.
This suggests that US investors remain bullish despite the potential bearish performance in April.
The outcome of the Ethereum ETF approval or denial will be a crucial event in May.
The U.S. SEC currently leans towards denial, and Balchunas states that there are no positive signs.
The performance of Bitcoin in the weeks following the halving could lead to more downside, giving Ethereum investors a reason to be cautious over the next 6–8 weeks.
