Ethereum Faces Downtrend Challenges Amid ETF Speculations

The price of Ethereum has experienced a notable decline since January 12, 2024, triggered by revelations of redemptions in the Grayscale Bitcoin Trust. As Ether struggles within a bearish technical formation, the spotlight shifts to the potential launch of Ethereum exchange-traded funds, echoing the previous trajectory seen with Bitcoin.

After the green light for the spot Bitcoin ETF, investors are turning their attention to the potential introduction of an ETH ETF. Ark Invest COO Tom Staudt has shared positive sentiments, anticipating its imminent launch. Despite setbacks in the approval process for BlackRock’s spot ETH ETF application and Grayscale’s ETH application, the crypto community holds onto optimism.

Ethereum is facing downward pressure, and there is a looming possibility of a 5% decline. However, there is hope that the order block ranging from $2,059 to $2,118 could serve as a support level, preventing further downward movement. A decisive breach below the midline of this order block, specifically at $2,088, would indicate a continuation of the ongoing downtrend.

Bearish signals are evident in key technical indicators such as the Relative Strength Index and Moving Average Convergence Divergence , both reflecting the current downward momentum. Additionally, the Average Directional Index further confirms the prevailing bearish trend.

Should the mentioned order block prove ineffective, Ethereum’s price might target the convergence point between the 200-day SMA and the horizontal line at $1,935, posing a risk to the broader bullish outlook.

On the positive side, a bullish scenario may witness Ethereum avoiding the anticipated 5% loss, regaining support at the lower boundary of the channel. Further upward momentum could propel ETH beyond the 50-day SMA at $2,335, challenging the $2,388 resistance, and potentially surging towards the midline of the channel at $2,600.

A successful breach above the $2,717 resistance level could pave the way for Ethereum to set its sights on the psychological milestone of $3,000, offering a potential gain of nearly 40% from current levels.

Amidst the anticipation of regulatory decisions and ETF application outcomes, Ethereum’s price trajectory remains uncertain. Traders and investors should be vigilant and monitor crucial technical levels for potential signs of trend reversals or continuations in the coming weeks.

Digital Assets Desk