Ethereum (ETH), the second-largest cryptocurrency, has risen over 5%, pushing its value past the $3,100 mark. This surge comes during a period of significant market recovery. After enduring sustained selling pressure, ETH bulls are gaining strength ahead of the U.S. Securities and Exchange Commission’s (SEC) impending decision on a spot Ethereum ETF.
Will Technical Indicators Drive Further Gains?
Ethereum is currently trading close to $3,087, having recently broken out of a falling wedge formation on the daily charts. If ETH can close above the descending resistance trendline it breached, it may signal a significant upward trend, as the falling wedge is generally considered a bullish pattern.
Despite these encouraging technical signals, Ethereum has lagged behind Bitcoin since the start of 2024. The ETH/BTC trading pair fell to its lowest level in three years at 0.044 on May 16, signaling ETH’s depreciation against BTC.
Which Market Factors Could Boost ETH?
Crypto analyst Michael van de Poppe has highlighted Ethereum’s potential for a substantial upward move. He stressed that the upcoming weeks are crucial for ETH and its ecosystem, especially given the current market’s bearish sentiment. Similarly, a recent research report from Coinbase echoed this optimism.
Coinbase analysts emphasized that ETH might surprise investors with an upward move in the coming months. The absence of significant supply-side pressures, like token unlocks or miner sales, positions ETH favorably for potential price increases.
Key Inferences for Ethereum Investors
- Watch for Ethereum’s closing prices above the descending resistance trendline for bullish confirmation.
- Be aware of the upcoming SEC decision on a spot Ethereum ETF, as it could attract institutional investment.
- Monitor the ETH/BTC trading pair for signs of relative strength or weakness against Bitcoin.
- Consider the influence of legal challenges on the SEC’s decisions, which could offer room for optimism.
Another critical factor highlighted by Coinbase analysts is the potential approval of a spot Ethereum ETF in the U.S. They argue that the market may be underestimating the timing and likelihood of this approval, which could trigger significant institutional investment and drive up ETH’s price. Even if the SEC initially rejects the ETF by the May 23, 2024 deadline, legal challenges might alter this outcome, presenting a positive scenario for Ethereum investors.