Why Isn’t ETH Going Up Despite the Good News?
ETH price is trading at $3,700, with daily losses of 2.85% and weekly gains of 18.7%.
The SEC has only approved Forms 19b-4, which are applications to list and quote securities on an exchange. However, it has not yet approved S-1 forms, which are more complete securities filings required for ETFs to begin trading.
Either way, the approval process is apparently not complete and there is one more step to go.
In fact, the price of ETH has been rising over the past few days, in line with this approval. Only when the exact date arrived, the market had already discounted the gains.
So, as always, the chart precedes the news and this time it happened with the jump of ether from levels around $3,000 on the 20th to $3,946 yesterday, May 23rd.
Thus, there is probably a correction driven by large capitulations of profits by actors who managed to buy at the weekly lows of $3,064.
1.3 billion ETH options expire today. That is, at least about 350,000 ETH where the calls outnumber the puts and with a maximum pain point of $3,200.
ETH Chart Analysis: Key Ranges
True to the assertion that chart action precedes news, yesterday’s Ethereum price action broke a vertical trend channel.
Although the rally really started last week when the price fell to 7-day lows of $3,064. Now the weekly highs are at $3,946 made yesterday, May 23rd.
Thus, the price has broken through a fundamental resistance level of $3,695 and if it manages to stay above this area in the coming days, we could expect further rallies.
The next fundamental resistance level to be overcome is the weekly high of $3,946. It is possible that a new ceiling will be formed above this resistance line before $4,000 is reached. The next resistance level would then be $4,066 or the two year high.
As far as the bearish outlook is concerned, $3,630 near the 50 EMA and then the psychological level of $3,500 should be mentioned as the first important support. Below that, $3,425 and finally $3,309 will act as a floor, which would signal the end of the current bullish momentum.
The price is trading above the 50, 100 and 200 exponential moving averages, except for the 20 EMA, which illustrates the correction of the bullish momentum. Meanwhile, the RSI is at 46.8, indicating that the market is leaning towards neutrality.
Crypto Market Reaction to Ethereum ETFs
The crypto market’s reaction to Ethereum ETFs has not been immediately upward, although some cryptocurrencies have seen an increase in the past few days. However, for the most part, the top 20 crypto assets have seen gains in the last 24 hours.
As mentioned before, the approval is not yet complete, but they pose other bullish scenarios for the entire crypto market. For example, one of them is: Once the Ethereum ETF is listed, are there chances that other cryptocurrencies will also get theirs?
Right now, this scenario seems unlikely because a good portion of the top 10 altcoins are in conflict with the SEC in their definition of whether they are securities or commodities.
Finally, some analysts believe that the rise will really begin when these instruments are listed, thus attracting a significant flow of capital to Ethereum.
By Audy Castaneda