Key Points
Ethereum is currently experiencing significant selling pressure. Over 30% has been shaved off its value from its March 2024 highs. The recent price drop below $3,000 and the increased activity of sellers suggest that there may not be any relief for hopeful buyers in the upcoming sessions.
Further Decline Predicted
An analyst on X notes that Ethereum continues to be bearish, moving within a falling wedge. The analyst predicts that Ethereum’s price will keep falling below immediate support levels.
The same analyst predicts a potential “washout” for Ethereum that could see the coin’s price fall below $2,700. Despite the current fear in the market, the analyst points out that Ethereum’s overall price action structure remains the same.
The daily chart’s Ethereum candlestick arrangement shows that Ethereum’s prices are within a bearish breakout formation. Since the sharp losses in mid-April, buyers have not been able to recover these losses.
Unless there’s a strong push above $3,300 and the descending wedge, sellers are likely to continue having the upper hand. Currently, Ethereum has strong support at $2,800. If the predicted “washout” occurs, Ethereum’s price may fall below $2,700 towards $2,600 and $2,200, which are two of the immediate support levels.
Spot Ethereum ETFs in Jeopardy
Adding to the bearish outlook is the increasing likelihood that the United States Securities and Exchange Commission (SEC) may reject the approval of spot Ethereum exchange-traded funds (ETFs) this month. This speculation arises from analysts suggesting that the commission might classify Ethereum as a security, which would derail ETF approval.
A finance lawyer on X confirmed that the United States SEC is considering classifying Ethereum as a security in their upcoming spot ETF decisions. Unlike Bitcoin, whose spot and futures ETFs were approved without such scrutiny, Ethereum faces this additional hurdle.
If the SEC, led by Gary Gensler, deems Ethereum a security, it could have severe implications. Not only could all spot ETF applications be denied, but there could be more repercussions. As per Grayscale’s Ethereum trusts, ETHE, terms and conditions, if the SEC classifies Ethereum as a security, all ETHE will be liquidated, and the trust closed.
In late April, Consensys, led by Ethereum’s co-founder Joseph Lubin, announced they are suing the United States SEC to protect the broader crypto ecosystem. By threatening to classify Ethereum as a security, ConsenSys argued that the regulator “would jeopardize the United States’ ability to use Ethereum and similar blockchain technology.”
