Ethereum Price Action: Surges and Opportunities

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By A D

Ethereum has revolutionised the crypto landscape, spawning countless projects and driving NFT and DeFi growth.

Ethereum (ETH), the second largest cryptocurrency by market cap, experienced a decline in price of over 3% recently.This drop is believed to be the result of a prominent whale carrying out a substantial sell-off. The whale deposited 25,000 ETH (equivalent to around $47.24 million) on Binance, only to withdraw a significant amount of USDT shortly afterward.

It is presumed that the whale has already sold a portion of their ETH. On-chain data indicates that the whale withdrew 16 million in USDT. However, they still retain approximately 8,000 ETH (valued at $14.7 million) that remains unsold.

Despite the sell-off, Ethereum’s price chart reveals the formation of a bull flag, a short-term consolidation pattern that occurs after a strong price movement. This pattern suggests a temporary break in the prevailing trend and indicates potential for a bullish continuation.

Analysts draw a comparison between Ethereum’s current price of $2,000 and Bitcoin’s structural strength when it was valued at $6,000 in 2019. Ethereum’s consistent formation of higher lows since mid-2022 is also highlighted, further contributing to a positive outlook for Ethereum.

The current price of Ethereum stands at $1,831, experiencing a decline of 2.75% in the past 24 hours. However, Inmortal’s analysis emphasizes a long-term perspective and recommends focusing on accumulating assets rather than closely monitoring short-term price fluctuations. According to analysts, appreciable price growth is expected across the market over time.

ethereum price chart
ETH is currently trading at $1,892.81, a 4.21% increase in the last 24 hrs. Image Source

Analysts also suggest that Bitcoin has the potential to reach $35,000, despite its current price being $30,103. Bearish sentiment accompanied by high engagement reflects market participants’ disbelief, while bullish sentiment with high engagement indicates greed and the potential for late investors to face losses if the market experiences a downturn.

Significant price surges have been witnessed in Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrencies, in response to BlackRock’s revelation about Bitcoin. The price of BTC has surpassed $30,000, reaching levels last seen in March, and this has resulted in a $100 billion boost in the overall crypto market within a week. Cameron Winklevoss from Gemini cautions that the opportunity to buy bitcoin is rapidly closing as BlackRock’s ETF bid prompts a flurry of filings. The promising prospects for Ethereum (ETH), Shiba Inu (SHIB), and Big Eyes Coin (BIG) indicate the potential for growth in the upcoming months.

Read: BlackRock Files Application for Bitcoin ETF

The price of Ethereum (ETH) has experienced a surge as buying power has accumulated at support levels, reflecting a bullish sentiment and increased investor interest. Over the last 24 hours, Ethereum’s price has risen by 7%, reaching approximately $1,865. Given its current momentum and the overall upward trend in the crypto market, there is a possibility for Ethereum to reclaim the $2,000 milestone, assuming Bitcoin continues its ascent towards the $35,000 range.

During April 2023, Ethereum’s price has consolidated within a narrow range of $1,850 to $1,950. Although there have been brief breaches of these levels, they have quickly retraced, resulting in what traders term a “fakeout.” Such movements can lead to losses for traders with tight stop-loss triggers. Presently, Ethereum is trading at a 60% discount from its all-time high of $4,890. If Ethereum’s price recovers in the future, investors could potentially witness a 158% return, making it an attractive investment opportunity for those who believe in Ethereum’s long-term prospects within the cryptocurrency market.

Between June 21 and June 24, Ethereum Classic (ETC) observed gains of 26.6%. The price rallied from $15.59 to $19.74, indicating a bullish trend in the short term. However, the performance of this altcoin may hinge on the movements of Bitcoin (BTC).

Bitcoin has surged from $26,000 to $31,000 over the past ten days as market sentiment turned bullish following the announcement of spot ETF applications from BlackRock. The most recent amended application came from ARK Invest, raising the question of whether this news can ignite another price surge for BTC.

Read: Bitcoin Analyst Predicts Significant Price Surge as Market Signals Bullish Sentiment

The breakout above the $15.55 resistance level last week was accompanied by increased trading volume. Ethereum Classic’s rise above $17 saw a substantial surge in volume. However, in the past four days, the bullish momentum has begun to wane, indicating an impending pullback. Traders have plotted Fibonacci retracement levels based on the rally, identifying $17.06 and $16.43 as the short-term support levels that ETC bulls should monitor.

The Relative Strength Index (RSI) currently sits at 48, reflecting neutral momentum, while the Chaikin Money Flow (CMF) has surpassed +0.05, indicating a rise in capital flow into the ETC market. If Bitcoin manages to reclaim the $31,000 mark, Ethereum Classic is likely to follow suit. The 23.6% extension level at $21 presents a viable target, while a drop below $16.43 would invalidate this scenario.

In an interview, Joseph Lubin, one of the co-founders of Ethereum and the CEO of ConsenSys, argued that Ethereum (ETH) should be considered a commodity, regardless of whether or not Gary Gensler, the chair of the Securities and Exchange Commission (SEC), acknowledges it. The regulatory environment in the United States has primarily focused on categorising cryptocurrencies and tokens as securities. Lubin pointed out the release of the Hinman documents, a speech given by former SEC commissioner Bill Hinman in 2018, which has generated significant attention. People within the agency have debated whether this indicates that the SEC agrees to classify ETH as a non-security, creating confusion.

Read: SEC suffers setback in Ripple lawsuit as court orders crucial evidence to be made public

an excerpt from the hinman proceedings
A speech given by former SEC commissioner Bill Hinman in 2018 where they classify ETH as a security. Image Source

Furthermore, Lubin believes that Ethereum’s transition from energy-intensive proof-of-work (PoW) to proof-of-stake (PoS) consensus further solidifies its classification as a commodity. As a prominent entrepreneur who contributed significantly to the development of Ethereum, Lubin is also the founder of ConsenSys, a software production studio based in Brooklyn.

The classification of digital assets has been a major factor impeding the establishment of a comprehensive regulatory framework. The Commodities and Futures Trading Commission (CFTC) and the SEC have been engaged in an ongoing dispute over the classification. If digital assets are deemed commodities, they fall under the purview of the CFTC, while considering them securities would subject them to SEC regulations.

Proposed legislation for digital assets, set to be voted on in early July 2023, could grant substantial authority to the CFTC, potentially placing it ahead of the SEC in terms of crypto regulation. Lubin emphasized that the CFTC has previously stated its view that Ether is a commodity.

CFTC Chairman Rostin Benham also contends that certain cryptocurrencies are securities, and he believes that Bitcoin (BTC), Ether, and Tether fall within the CFTC’s jurisdiction.

During his time as an MIT professor, SEC Chair Gary Gensler delivered lectures on the classification of cryptocurrencies as securities or commodities. However, the regulatory crackdown by the SEC on the crypto industry in recent years, with a focus on declaring numerous cryptocurrencies as securities, contradicts his earlier statements as an academic.

According to a reports, the next targets of regulatory action could be stablecoins and decentralised finance (DeFi) following scrutiny on digital assets and crypto exchanges for offering unregistered securities. Stablecoins play a crucial role in the DeFi ecosystem, so regulatory measures directed towards them could have broader implications for the entire system.

Members of Congress, including Cynthia Lummis and Kristen Gillibrand, are working on legislation to address the classification of cryptocurrencies. They are aligning with the CFTC’s perspective that Ether and Bitcoin should be considered commodities.

The unsealing of the Hinman documents in June 2023 revealed potential areas for improvement in the SEC’s ability to regulate the crypto industry. In the 2018 speech, Hinman argued against classifying Ether as a security.

Following the collapse of FTX, regulatory actions by the SEC against the crypto industry have increased by 183%. While regulators aim to protect citizens from investing in unregistered financial instruments, their methods have faced criticism from the crypto community.

SEC Chairman Gary Gensler’s stance on the classification of cryptocurrencies has been inconsistent. A recently surfaced video from 2018 showed him stating that BTC and ETH were “not securities.” However, in subsequent years, he has only referred to Bitcoin as a commodity and avoided commenting on the status of other tokens.

During a hearing with the House Financial Services Committee in April 2023, Gensler evaded providing a direct explanation on whether the SEC considers ETH a security or a commodity, offering vague responses instead.

It is worth noting that the SEC has recently filed lawsuits against major players in the crypto industry, such as Binance and Coinbase, alleging the offering of trading services with unregistered securities. Surprisingly, ETH was not included in the list of assets mentioned in the lawsuits.

CME Group, a dominant player in the global derivatives marketplace, is preparing to introduce futures contracts based on the Ether/Bitcoin Ratio, pending regulatory clearance by July 31. This unique contract type will enable individuals to simultaneously invest in bitcoin and ether, simplifying the investment process.

Futures contracts are agreements to buy or sell a specific asset at a predetermined price and time in the future. They essentially involve speculation on the future price of an asset. Traders can either take a long position, anticipating a price increase, or a short position, expecting a price decrease. These contracts adhere to standardised specifications of quality and quantity to facilitate trading on a futures exchange. Settlement of the Ether/Bitcoin Ratio futures will be in cash, based on the final prices of ether and bitcoin. This innovative product aims to unlock opportunities for a broader clientele to hedge positions and implement various trading strategies more cost-effectively.

Over the years, CME Group has consistently expanded its portfolio of cryptocurrency-related products, including the introduction of Bitcoin Futures in 2017, marking a significant milestone in the acceptance of cryptocurrencies in the mainstream financial world. Despite initial controversies, these futures contracts have become indispensable tools for institutional investors seeking exposure to Bitcoin. Ether futures were launched in February 2021, further diversifying CME Group’s suite of crypto derivative offerings. Micro Bitcoin and Ether futures were subsequently introduced, allowing investors to access these digital assets with lower capital requirements. Additionally, CME Group added Bitcoin Euro and Ether Euro futures to its portfolio in August.

Ethereum, often hailed as the crown jewel of the crypto realm, was brought into existence in 2015 by the Vitalik Buterin, with the goal of surpassing Bitcoin’s mere transactional capabilities. It offers a decentralised platform for developers to construct smart contracts and decentralised applications (dApps) using its native programming language called Solidity.

The impact of Ethereum on the cryptocurrency landscape cannot be overstated. Its vibrant ecosystem has given birth to numerous projects and propelled the rise of non-fungible tokens (NFTs) and decentralised finance (DeFi). With Ethereum, users can invest, trade, and engage in various financial activities without relying on intermediaries.

Nevertheless, Ethereum’s success has come at a cost – scalability. As the network’s popularity surged, so did transaction fees and network congestion. However, Ethereum has been diligently working on its roadmap to address these challenges. The upcoming Ethereum upgrade aims to introduce a more efficient consensus mechanism, enhancing the proof-of-stake (PoS) model. This, in turn, should alleviate scalability concerns and reduce transaction costs.

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