Ethereum has been experiencing significant selling pressure, with a decrease of over 30% from its highs in March 2024. The price recently fell below $3,000, and with sellers becoming more aggressive, there may be tough times ahead for those looking to buy optimistically in the coming sessions.
Analyst Predicts a Further Drop to $2,700
According to an analyst on X, Ethereum is currently bearish and trading within a falling wedge pattern. The analyst forecasts that ETH will continue to decline below its immediate support levels.
The analyst also suggests a potential “washout” scenario for ETH, which could see its price drop below $2,700. Despite the prevalent fear in the market, the overall price action structure of Ethereum remains consistent.
The daily candlestick pattern of Ethereum indicates a bearish breakout formation. Following significant losses in mid-April, buyers have yet to recover from these losses.
Unless Ethereum breaks above $3,300 and the descending wedge with a strong push, the likelihood of continued selling pressure remains high. Currently, Ethereum has robust support at $2,800. If the projected “washout” occurs, ETH could drop below $2,700 towards $2,600 and $2,200, which are its immediate support levels.
Challenges for Spot Ethereum ETFs Increase
The bearish sentiment is exacerbated by the increasing possibility that the United States Securities and Exchange Commission (SEC) may reject the approval of spot Ethereum exchange-traded funds (ETFs) this month. Some analysts speculate that the SEC might classify Ethereum as a security, leading to delays in ETF approvals.
A financial lawyer on X confirmed that the SEC is contemplating categorizing ETH as a security in their upcoming spot ETF decisions. Unlike Bitcoin, which saw its spot and futures ETFs approved without similar scrutiny, Ethereum faces this additional regulatory challenge.
If the SEC, led by Gary Gensler, deems Ethereum a security, it could have severe consequences. Not only could all spot ETF applications be rejected, but as part of Grayscale’s Ethereum trusts (ETHE), they could be liquidated and the trust closed.
In late April, Consensys, led by Ethereum’s co-founder Joseph Lubin, announced that they are taking legal action against the SEC to safeguard the broader crypto ecosystem. ConsenSys argues that by considering ETH as a security, the SEC could hinder the use of Ethereum and similar blockchain technologies in the United States.
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