Ethereum Prices Forecast: ETH Dips, but SEC Actions Cast a Lengthy Shadow

Key Insights:

• Monday saw Ethereum (ETH) decline by 1.01%, offsetting Sunday’s 0.96% ascent; closing at $1,668.
• Binance-related developments soured sentiment, reflecting its impact on global crypto dynamics.
• SEC’s hesitation on BTC-Spot ETFs indirectly casts shadows on Ethereum’s ETF prospects.

Monday Overview

Ethereum (ETH) fell by 1.01% on Monday. Reversing a 0.96% gain from Sunday, ETH wrapped up the day at $1,668. Despite the bearish session, ETH avoided sub-$1,650 for the third consecutive session.

Bearish Sentiment Overshadows ETH-Futures ETF Optimism

ETH joined the broader market in the red on Monday, with Binance-related news weighing on investor sentiment.

Investors responded to news of Binance suspending EUR deposits and withdrawals via SEPA. Binance users have faced similar roadblocks in the US, with increased regulatory scrutiny and the SEC v Binance lawsuit leading to partners cutting ties with the world’s largest crypto exchange.

Uncertainty toward the SEC approving one, some, or all of the BTC-Spot ETFs added to the bearish mood. While the approval of BTC-Spot ETFs does not directly impact ETH, we expect ETH-Spot ETFs to follow the ETH-Futures ETFs currently pending SEC approval. However, an SEC decision to disapprove the BTC-Spot Applications would delay the submission of ETH-Spot ETF applications.

Other headwinds include uncertainty about the SEC v Ripple case, the SEC progress toward appealing the Judge Torres rulings, and the SEC cases against Binance and Coinbase (COIN).

A successful SEC appeal of the Judge Torres rulings and an SEC win against Coinbase would adversely impact the US crypto market and give the SEC powers to target ETH, XRP, and others sitting in the SEC Securities Basket.

ETH has become sensitive to securities-related cases since the Merge. SEC Chair Gary Gensler threw ETH into the SEC Securities Basket after the Ethereum transition to a Proof-of-Stake protocol.

SEC activity will remain a focal point, with the ongoing SEC cases against Ripple, Coinbase, and Binance the areas of interest. However, US lawmaker chatter and ETF-related news would also need consideration.

We would expect a relief rally in response to progress toward the approval of ETH-Futures ETF and BTC-Spot ETFs, though BTC-Spot ETF approvals would likely have more impact. The SEC approval of BTC-Spot ETFs would fuel an influx of institutional money, a bullish price scenario for the crypto market.

Staking Statistics Send Bullish Signals Despite the Bearish Sentiment

Staking inflows rebounded on Monday. According to CryptoQuant, staking inflows surged from 24,448 on Sunday to 87,488 on Monday. Monday inflows were higher, relative to recent Monday trends, a bullish price signal.

(Values are in ETH unless otherwise stated)

The overnight withdrawal profile remained bearish. Principal withdrawals spiked before returning to normal levels. However, withdrawal projections for the morning session are bullish. Projections show ETH withdrawals will sit at normal withdrawal levels this morning.

On Monday, the net ETH staking balance stood at a 22,650 surplus ($37.89 million), down 63.4% over 24 hours. Deposits totaled 27,320 versus withdrawals of 4,660.

According to TokenUnlocks, total pending withdrawals stood at 75,230, equivalent to approximately $123.46 million. Notably, the staking APR stood at 4.92%, unchanged over 24 hours. The downward trend in the staking APR, the slide in the net staking balance, and the surge in pending withdrawals are bearish price signals.

(Values are in ETH unless otherwise stated)

Ethereum Price Action

This morning, ETH was down 0.24% to $1,664. A mixed start to the day saw ETH rise to an early high of $1,669 before falling to a low of $1,661.

Daily Chart

The Daily Chart showed ETH hovering below the upper level of the $1,670 – $1,650 support band. ETH also remained below the 50-day and 200-day EMAs, sending bearish near and longer-term price signals.

Looking at the 14-Daily RSI, 24.53 showed ETH in oversold territory. The RSI aligns with the EMAs, signaling a fall through the $1,670 – $1,650 support band to bring sub-$1,600 into play. A return to $1,700 would give the bulls a run at the 200-day EMA and the $1,795 – $1,815 resistance band.

4-Hourly Chart

Looking at the 4-Hourly Chart, the ETH/USD faces strong resistance at $1,700. ETH sits below the upper level of the $1,670 – $1,650 support band. Significantly, ETH also sits below 50-day and 200-day EMAs, affirming bearish near and longer-term price signals.

An ETH move through the $1,670 – $1,650 support band would give the bulls a run at the 50-day EMA and the $1,795 – $1,815 resistance band. However, failure to target the 50-day EMA would leave the $1,670 – $1,650 support band and sub-$1,600 in view.

The 14-4H RSI reading of 38.06 reflects bearish sentiment, with selling pressure outweighing buying pressure. Significantly, the RSI aligns with the 50-day EMA, signaling a fall through the $1,670 – $1,650 support band to target sub-$1,600.