Ethereum at the time of writing trades below the $3K market after declining by over 11% over the past week.
After about $84.87 million in Bitcoin were transferred to hot wallets managed by a Japanese exchange, the now-defunct Mt. Gox exchange started paying back its creditors. The overall bad attitude in the crypto market was heightened by such a narrative, with Ethereum leading the way in sharp falls for the week.
Many anticipated that the general market attitude would not impact Ethereum because of the impending spot ETH ETF launch, However, bears may have gained momentum because of the Securities & Exchange Commission’s (SEC) tardiness in approving issuers’ S-1 drafts.
Spot ETH ETF issuers’ 19b-4 forms were approved by the SEC on May 23, but the products can only be traded once their S-1s are approved. Among the potential issuers are VanEck, BlackRock, Bitwise, Grayscale, 21Shares, Fidelity, Franklin Templeton, and Invesco.
If approved, ETH’s price might surge to challenge the $4K downward trendline, bucking a sluggish market trend and minimal selling pressure. The Ethereum coin won’t start to increase again unless there is a positive break out of the resistance level.
Since May, when most investors thought the SEC would reject a spot ETH ETF after learning that it was investigating Ethereum 2.0, the price of ETH has fallen to its lowest point. ETH fell below the critical $2,852 support level, although it soon began to exhibit mild exhaustion.
Upon closely examining the daily chart, one can see that sellers eventually took control, resulting in a break below the significant 100-day moving average at $3386, following a prolonged stretch of corrective retracements at this critical MA.
The breach accelerated the negative trend because this area was teeming with buying interest and demand. It also created a major long liquidation cascade. Consequently, the price fell and broke through the significant 200-day moving average of $3,096.
With sellers in control, this price action affirms Ethereum is in a pessimistic mood. On the other hand, the likelihood of the negative trend continuing increases if there is a retreat to the 200-day MA breaking. Since mid-February, Ethereum has been unable to maintain a sustained move below this level of support. Furthermore, according to statistics from IntoTheBlock, investors bought roughly 57 million ETH between $2,268 and $2,909.
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