The second-largest cryptocurrency, Ethereum (ETH), has surged over 5%, surpassing the $3,100 threshold amid a strong market recovery. After weeks of strong selling pressure, ETH bulls are showing strength ahead of the upcoming U.S. Securities and Exchange Commission (SEC) decision on a spot Ethereum ETF in the U.S.
Ethereum’s Price Breakout and Technical Indicators
Currently trading around $3,087, Ethereum recently broke out of a falling wedge formation on the daily timeframe. If ETH manages to close a candle above the descending resistance trendline it broke, it could signal the start of a significant upward trend, as the falling wedge formation is typically seen as a bullish indicator.
Despite these positive technical signals, Ethereum has underperformed compared to Bitcoin (BTC) since the beginning of 2024. The ETH/BTC trading pair even reached its lowest level in three years at 0.044 on May 16, indicating that ETH is losing value against BTC.
Market Analysts Optimistic About ETH
Popular crypto analyst Michael van de Poppe has drawn attention to ETH, suggesting that Ethereum might be preparing for a significant upward move. He emphasized that the coming weeks will be crucial for ETH and the Ethereum ecosystem, especially given the current negative market sentiment. A similar optimistic outlook was noted in a recent research report by Coinbase.
In their latest report, analysts from the U.S.-based crypto exchange Coinbase highlighted that ETH could surprise investors with an upward move in the coming months. The report emphasized that ETH lacks significant supply-side pressures, such as token unlocks or miner sales, which could contribute to potential price increases. The absence of such selling pressure positions ETH favorably for a rise.
Coinbase analysts also pointed to the anticipated approval of a spot Ethereum ETF in the U.S. as another key factor that could contribute to the potential rise of the altcoin king. They noted that the market might be underestimating both the timing and likelihood of this approval. According to them, the approval of a spot ETF could attract more institutional investment to ETH, significantly boosting its price.
Analysts believe that even if the SEC issues a rejection for the spot Ethereum ETF on the initial deadline of May 23, 2024, legal challenges could potentially change this decision. This legal possibility leaves room for optimism and potential upward surprises for Ethereum investors.
