UseTheBitcoin Market Update (ETH) | May 15th, 2024

In this article, let’s examine the insights shared by our Technical Analyst at UseTheBitcoin as he walks us through his personal trading approach and observations on the second largest crypto by market cap.

Fundamental Drivers For ETH

The US Securities and Exchange Commission (SEC) is investigating reasons to deny applications for ETFs that directly hold Ethereum. The uncertainty lies in how Ethereum should be classified, whether as a security or a commodity, and could significantly impact the approval of Ethereum spot ETFs in the future.

If Ethereum is classified as a security, it would face stricter regulations. These include more rigorous disclosure requirements for companies issuing the ETF, investor protection measures, and additional compliance steps overseen by the securities regulator. 

Furthermore, tax treatment and reporting requirements for securities could differ from commodities, potentially making Ethereum less appealing to investors and hindering the demand for Ethereum spot ETFs. ETF providers would also need to adjust their operations to comply with security regulations, which could increase costs and complexity.

Technical Analysis

Technical analysis shows that Ethereum is trading below key Fibonacci retracement levels, indicating potential selling pressure.

A bounce back and consolidation within these Fibonacci zones is likely. However, a sustained decline could see Ethereum fall further towards its 200-day moving average (200MA), suggesting a deeper correction.

While the current price action suggests a bullish flag pattern, the Ethereum spot ETF approvals could be a major catalyst as many investors anticipate this news before fully committing and driving the price back up.

Final Thoughts

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