Ethereum (ETH) prices have been falling since the beginning of the week, with the second-largest cryptocurrency lagging behind Bitcoin (BTC)'s resurgence.
According to on-chain data, the outlook for ETH looks bleak, with the asset failing to break above the $3,300 resistance level. Currently, ETH is trading at the $3,155 level, but technical analysts are pointing out a bearish breakout formation on the chart.
With losses of just under 1% over the past 24 hours, enthusiasts are closely watching the asset's price movements. As bulls and bears prepare for a showdown over the next few days, the path of least resistance is for prices to fall.
If the bears prevail, the price is expected to fall below $3,000, which is in line with short sellers' expectations. If the price stays below $3,000, a wave of new investment in the asset could trigger a new price rally, prompting traders to brace for short-term impacts.
At the moment, 24-hour trading volume is pegged at $13 billion, and increased trading is often interpreted as an attempt to reject bearish sentiment.
Bulls are betting on a variety of positive factors to seize some control, citing growing interest in Ethereum and its Layer 2 solutions. On-chain data shows that over 10 million wallets interact with Ethereum's base layer and its L2 platform every week, which is a strong growth indicator.
Ark Invest’s Cathie Wood’s recent comments on Ethereum have made enthusiasts optimistic. In mid-April, Ark Invest held a Big Ideas event during which the company's CEO stated that Ethereum will reach a market capitalization of $20 trillion by 2032, with a unit price of $160,000 at the turn of the decade. He claimed it could be $6,000.
Although Woods' prediction is far into the future, this assertion pushed ETH prices higher in the short term, erasing previous losses during the correction.
Tough sentiment from the SEC
ETH price fell under the weight of a Reuters report suggesting that the U.S. Securities and Exchange Commission has rejected Spot Ether ETFs outright.
The SEC will withhold approval of ETF applications from VanEck and ARK Investment Management, according to the report. Anonymous sources cited the regulator's position in recent meetings with both issuers.
The SEC has not raised any concerns about the application, choosing a moderate approach, the people said, which experts say could be interpreted as a potential rejection.
“Approval appears likely to be delayed until late 2024 or even later.” said one expert. “The regulatory landscape still appears cloudy.”
