Ethereum Price Analysis: Will ETH ETF Denial Jitters Trigger Sell-Off To $2,500?

Ethereum Price Analysis: The cryptocurrency market continues to face headwinds after Bitcoin halving — an event anticipated to impact the supply of the largest digital asset significantly. Ethereum, like Bitcoin price and other altcoins, reveals emerging weakness with investors expressing confusion by selling their holdings. The modest 5.7% decline in ETH’s value alongside BTC’s 4.5% reflects the generally bearish outlook across the market.

Ethereum hovers at $3,105 during US business hours on Thursday. The 32% surge in the trading volume side-by-side with the price drop reveals reduced risk appetite and investor willingness to close open positions. On top of that, a 5% correction in the market cap to $382 billion mirrors the precarious state of the crypto market.

The SEC Set To Deny ETH ETF – Issuers Reckon

The optimism for a spot Ethereum Exchange-traded fund (ETF) gained momentum in Q1 after the Securities and Exchange Commission (SEC) approved a bunch of Bitcoin ETFs.

Several potential ETH ETF issuers moved to file with the agency for approval to operate the products in the United States. Market sentiment on Ethereum improved significantly, with experts projecting a similar impact to the BTC ETF on the price of Bitcoin which hit a new all-time high of $73,837 in March, CoinGecko data shows.

However, according to the latest report, the SEC could move to deny Ethereum ETFs. The report published by Reuters cited issuers of the ETF and other companies who said that the regulator is not eager to meet with them.

So far nine firms have filed proposals with the SEC to list Ethereum ETFs including VanEck, and ARK Investment Management. Spot ETFs track the price of Ethereum in real-time.

The SEC is expected to decide on the first proposals filed by VanEck and ARK Invest by May 23, 2024.

Based on the report, communication with the SEC has not been substantive and mainly one-sided. Contrary to this, the SEC frequently met with issuers of Bitcoin ETFs before the approval in January where they discussed details related to the new investment offers.

Due to the one-sided state of communication, potential issuers of Ethereum ETFs say that they expect the regulator to deny their applications.

While the launch of Bitcoin ETFs was the main driving force, the lack of a spot ETE ETF may derail the ascent to new all-time highs. Moreover, the state of the crypto market is delicate with negative denial news likely to add to the selling pressure, triggering a sell-off to $2,500.

Ethereum Price Analysis As More Declines Linger

The Money Flow Index (MFI) below the 40 mark reinforces the bearish grip on Ether. In other words, there’s more money flowing out than into Ethereum markets, exerting more pressure on the price which is currently 24% below the 2024 peak of $4,089. The token also sits below two bull market indicators, the 20-day Exponential Moving Average (EMA) and the 50-day EMA (the blue and red lines on the chart).

If Ethereum price closes the day below $3,100 resistance/support, the chances of a flash drop under $3,000 will increase. The 200-day EMA (purple line) will provide support at $2,740, possibly preventing further losses to $2,500.

Nevertheless, the correction could flip profitable if Ethereum price gains momentum from the forming falling wedge pattern. A break above the upper trend line could encourage traders to buy ETH betting on a trend reversal toward the $4,000 mark.