The combination of rising US bond yields, concerns that UK inflation could turn warmer than expected for the US inflation outlook and an aggressive liquidation of long positions saw price ether (ETH) dropped sharply on Wednesday.
But price prediction Still excited.
token, which powers smart-contract-enabled Ethereum The second-most valuable cryptocurrency by blockchain and market capitalization behind bitcoin, according to TradingView, last traded south of the $2,000 level, down nearly 6.0% on the day.
That means ETH That’s down about 7.5% from the multi-month high hit in the mid-$2,100s last week.
Wednesday’s decline led to a sharp increase in liquidations of long leveraged positions ETH futures positions, according to data presented by crypto derivatives analytics website CoinGlass.
Nearly $45 million worth of long positions were liquidated so far this Wednesday, the most since 8th of March.
SEC Chairman Gensler Refuses to Say Whether ETH Is a Security or Not – Bullish?
Some analysts cited that uncertainty regarding the outlook for regulation in the US is weighing on the ETH price as well.
seconds Chairman Gary Gensler, whose agency has been pushing for greater oversight of crypto markets and a crackdown on crypto firms operating in the US in recent months, appeared before Congress on Tuesday.
Congressman Patrick McHenry, who chairs the House Financial Services Committee, pressed Gensler to be specific about whether or not he views ETH as a security.
Although the SEC has already taken enforcement action against US-based crypto firms based on the view that it is a security, Gensler avoided the question and declined to give a definitive answer about ETH. .
But in the past gensler is on record as saying that he views ETH as a security.
Some have suggested that Gensler’s reluctance to label ETH as a security before Congress moves swiftly for ETH, noting that it leaves the door open for the agency to potentially is backing away from trying to regulate ETH as a security.
Market reaction suggests that this is not a unanimous view.
Indeed, it seems the market hasn’t liked the SEC chairman’s lack of clarity.
Investors in ETH and other similar cryptocurrencies will remain concerned about what enforcement action may come from the SEC in the coming months.
Price Prediction – Where’s Next for ETH?
Ether is approaching a key area of short-term support, where the early April high (at $1,940), the 21-day moving average (at $1,927) and an uptrend since late March lows all intersect.
A bounce here would be a strong vote of confidence in the market’s near-term bullish momentum and would likely result in a bullish rally to yearly highs in the mid-$2,100s and perhaps above $2,300 towards the next key resistance area.
Notably, the latest decline has seen the 14-day Relative Strength Index (RSI) of Ethereum breaking out of the overbought region, which means a low risk of ongoing profit-taking/long-liquidations.
Post-Ethereum Blockchain Upgrade Optimism Coupled With Ongoing Double Deflationary Tailwinds More ETH Going Into Staking Contracts And the continued burn means that, in the medium to long term, ETH’s trading bias is likely to remain on the upside, unless the macro picture turns heavily bearish.
Technical tailwinds may also continue to lift the crypto, such as ETH’s powerful rally from the 200DMA last month and continued support from the “golden cross” in early February.