For many investors, ETH price is back to the drawing board, down 9.7% in a week to $1,664 on Tuesday.
The leading smart contracts token tumbled from support at $1,800 last week amid a market-wide sell-off that saw Bitcoin price drop from its range support at $29,000, before seeking support at $25,000.
Ethereum came under heavy selling pressure, as traders swiftly switched to short positions that left many investors liquidated.
Support that had been anticipated in the region between $1,780 and $1,800 due to the presence of the 200-day Exponential Moving Average (EMA) did little to stop bears from pushing the price lower.
Trading below the upper dotted ascending trendline, which had provided support since November 2022, following the FTX exchange implosion enhanced the bearish sentiments, and thus encouraged traders to sell more.
Although ETH price touched $1,545 during the descent, a knee-jerk reaction reclaimed support at $1,600 aided by the lower ascending trendline. This buyer congestion remains critical for the resumption of the uptrend, even as Ethereum dodders at $1,664.
ETH Price On The Cusp Of Another 17% Sell-Off
Ethereum has from April, following the Shapella upgrade rally to the 2023 highs of $2,144, been facing a weakening market structure. The tug of war between bulls and bears confined Ether in a rectangle pattern, with resistance at $2,000 and support at $1,650 – call it consolidation.
Within the rectangle, a narrow range formed with Ethereum holding onto higher support at $1,800. Following, the losses incurred last week, ETH price now faces a crossroads:
A break below the rectangle support at $1,650 could trigger another breakdown, where Ethereum may drop 17.76% to $1,56. On the other side of the fence, if this support holds, bulls will likely be encouraged to double down their efforts and push for a breakout above $2,000.
In the short term, the outcome is likely to be bearish based on the outlook exhibited by the Moving Average Convergence Divergence (MACD) indicator as it moves further below the mean line (0.00).
The Relative Strength Index (RSI), although in a sustained downtrend from the overbought region in early July, is not quite oversold. This suggests that sellers still have room to wiggle, pushing the price further down.
Uncertainty About the SEC’s Spot ETF Approval Dampens Crypto Markets
Investors are jittery when it comes to seeking more exposure to crypto products, as revealed by CoinShares’ digital asset investment products report.
Digital asset investment products recorded outflows of up to $55 million last week compared to $29 million in fund inflows in the previous week.
Although the market-wide sell-off may have contributed to the dismal numbers in digital asset investment products, the CoinShares report argued that it may be attributed to a “reaction to recent media highlighting that a decision by the US Securities & Exchange Commission in allowing a US spot-based ETF is not imminent.”
According to John Reed, a former SEC attorney, the SEC is unlikely to approve a spot ETF. Reed cited insights from Better Markets who wrote a letter to the SEC urging the agency not to approve any spot ETFs.
Will the SEC Approve Any Of The Recent Bitcoin Spot ETF Applications?
People often ask for my opinion on whether the SEC will approve any of the recent spate of bitcoin spot ETF applications, which is an interesting and important question.
My take is that the current SEC will… pic.twitter.com/lPXebl03Y4
— John Reed Stark (@JohnReedStark) August 13, 2023
Although Bitcoin was the most hit by the uncertainty surrounding the ETF approval, Ethereum saw $9 million in outflows, which erased the $2.5 million it recorded in the week before.
Crypto markets are likely to remain in this dilapidated environment, especially with the Federal Reserve considering more rate hikes in September.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
