Ethereum
Ethereum: Rebound May Be Short-Lived – Watch Out for New Selling Pressure
The cryptocurrency market finally found some respite this week, ending its persistent decline. While the selloff was the main cause of the market downturn, altcoins also suffered. Despite significant challenges, such as the Mt. Gox situation and the German government’s Bitcoin selloff, a surge in demand for U.S.-based Bitcoin ETFs provided a buffer against further declines.
This week, the cryptocurrency market broke its downward trend, providing investors with some much-needed respite. The main driver of this decline was the Bitcoin selloff, which also negatively impacted the altcoin market. Recent developments, such as the Mt. Gox situation and the German government’s Bitcoin selloff, have cast a shadow over the market over the past month. However, the growing demand for US-based Bitcoin ETFs has provided some support against further declines.
Even so, it is too early to declare a market recovery. The total cryptocurrency market cap has yet to recover the losses suffered in early July, despite this week’s partial recovery. For a full recovery, the market cap needs to close above $2.15 trillion (.236 Fib) on a weekly basis, breaking through resistance up to $2.3 trillion. This could happen if the Bitcoin sell-off ends and positive developments materialize, such as the launch of Ethereum spot ETFs.
Ethereum Rebounds From Buy Zone
Ethereum showed more resilience compared to the broader market throughout June. However, the SEC’s delayed approval for ETF issuance dampened demand, leading to a significant decline in early July. Last week, Ethereum tested its April-May lows, falling into the $2,800 range, but saw rapid buying in this demand zone. This week, Ethereum saw positive price movements due to new developments for spot ETFs, reaching the critical resistance point of $3,100.
Ethereum Faces Crucial Resistance Levels Awaiting SEC Decision
Ethereum (ETH) is approaching important resistance levels that could determine its near-term trajectory. Based on the latest bearish cycle, $3,125 aligns with a .236 Fib level, making it a critical resistance point. A clear daily close above this mark is essential for Ethereum to target $3,350, the 3-month exponential moving average, which could signal a trend reversal into positive territory.
The potential approval of the SEC’s ETH spot ETF will be a key catalyst for Ethereum’s price movement. While this approval could boost demand and send prices higher, it could also trigger a sell-off once the anticipation materializes. Therefore, Ethereum’s ability to respond positively to the SEC’s decision is crucial for a sustainable rally. If ETF inflows significantly increase demand, any initial selling pressure could be alleviated.
For Ethereum to break its short-term downtrend and target $3,350, it must first break the resistance at $3,125. In the event of a pullback, $3,000 serves as an immediate support level. Failure to overcome the current resistance could result in a retest of this support. Holding $3,000 could pave the way for a stronger move beyond $3,125, while a break below $3,000 could trigger a decline towards the $2,800 demand zone.
The $2,800 support has held since April, but each test weakens it, increasing the risk of a breakout. If this level fails, Ethereum’s next support could form around $2,600.
In conclusion, the Ethereum market is closely monitoring the developments around the ETF approval. A confirmed trend reversal requires Ethereum to establish a solid floor above $3,350 this month. Until then, traders should closely monitor the $3,125 and $3,000 levels as indicators of potential moves.
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Disclaimer: This article is written for informational purposes only. It does not constitute a solicitation, offer, advice, opinion or investment recommendation. It is therefore not intended to encourage the purchase of assets in any way. I would like to remind you that any type of asset is evaluated from multiple angles and is very risky. Therefore, any investment decision and the associated risk are the responsibility of the investor.