Could $4,000 Be The Next Move?
Ethereum, the second-largest cryptocurrency by market capitalization, is currently poised at a crucial juncture, with a prediction of a potential breakout.
Prominent crypto analyst Jelle recently pointed out that Ethereum is nearing the end of a falling wedge pattern, a situation often interpreted as a bullish signal in technical analysis.
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Technical Indicators And Market Sentiment
Jelle observed a falling wedge pattern on Ethereum’s chart, which emerges as ETH recently reclaimed its 100-day Exponential Moving Average (EMA), a development that further bolsters the bullish case.
According to Jelle, if Ethereum can sustain this momentum and push past the upper boundary of the wedge, it might set its sights on the $4,000 level, a significant “psychological and technical” threshold.
$ETH is close to breaking out from this falling wedge!
After reclaiming the 100-day EMA, all it needs is a little push to break out from the multi-month continuation pattern.
Target: >$4000.
— Jelle (@CryptoJelleNL) May 20, 2024
The anticipation of this breakout is heightened by the current market dynamics, where Ethereum is trading just above $3,000, specifically trading at price of $3,088, at the time of writing.
The asset has experienced a modest increase of 0.2% in the last 24 hours and a total of 4.1% over the past week. However, looking at the price chart, Ethereum appears to have been consolidating just above the $3,000 level, suggesting a building base for future significant movement.
This consolidation period, often called accumulation, may be largely due to market participants awaiting the upcoming decision from the US Securities and Exchange Commission (SEC) on the approval of the much-anticipated spot Ethereum ETF.
With this critical announcement expected later in the week, buyers and sellers appear to be in a holding pattern, cautiously awaiting the news that will likely determine their next strategic moves.
Ethereum Regulatory Decisions And Market Speculation
So far, Bloomberg’s Senior ETF Analyst, Eric Balchunas, has expressed a cautious stance concerning the spot Ethereum ETF estimating only a 25% chance that the spot ETF will receive approval.
On the other hand, Nate Geraci, President of the ETF Store, has revealed that the process for ETF approval involves several critical steps, including the acceptance of both 19b-4 filings (Exchange Rule Changes) and S-1 registration statements (initial registration forms for new securities).
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While there is optimism that the 19b-4 filings might be approved, there is less certainty about the S-1s. The SEC’s slow engagement with these filings could indicate a prolonged review period, which might delay the introduction of Ethereum spot ETFs.
SEC decision deadline this week on spot eth ETFs…
SEC must approve both the 19b-4s (exchange rule changes) & S-1s (registration statements) for ETFs to launch.
Technically possible for SEC to approve 19b-4s & then slow play S-1s (esp given reported lack of engagement here).
— Nate Geraci (@NateGeraci) May 19, 2024
Featured image from Unsplash, Chart from TradingView
