Beyond reaching the psychological barrier of $3,000, Ethereum reached $3,100 last day, a price level that had not been seen since April 2022. In this way it managed to reach two-year highs.
The price of Ethereum (ETH) is currently trading at $3,153 and has increased by 3.55% in the last 24 hours. The second-largest cryptocurrency on the market reached $3,000 on February 20 and is trading comfortably above that level today.
The price moves higher on the possibility of the approval of ETH spot ETFs in May. Precisely the deadline for the aforementioned approval is May 26. As the prices confirm, there is great expectation around it.
However, there are other factors that drive ETH and another of them is the upcoming Dencun update that will open the doors of this Blockchain to a definitive solution for its scalability.
The reaction to this favorable environment is a large number of whales buying ETH. This was reflected in the amount of ETH in the largest ETH addresses increasing last week (as well as fund outflows decreasing). This was reported by Santiment.
ETH Price Chart Analysis
In order to carry out an objective analysis on what the price direction will be during the next few days, it is necessary to analyze its charts.
The first fact that stands out is the formation of an ascending channel, which is the continuation of a long-term trend from the annual lows of $1,438 in March 2023. Bullish traders should take into account price stability above $3,000 over the next few days, which would reaffirm the current trend. However, a loss from the current levels could lead to a correction to $2,875 and $2,800.
Returning to the bullish prediction and to reach the $3,500 mark, the price of Ethereum must first overcome strong resistances, such as $3,280 and $3,300. Other indicators, such as the MACD, show that the king of altcoins has a clear bullish advantage and suggest an increase in price in the short term. In contrast, there is the relative strength index, which shows that the price is currently in an overvaluation zone and is ready for a correction.
Finally, ETH open interest is reportedly approaching its all-time high in 2021. That is, the number of open ETH futures contracts that have not been settled is about to reach all-time highs. A quite interesting figure that demonstrates the current potential of Ethereum.
Ethereum ETF Lays Its Cards on the Table
The SEC will be the one to give its verdict on May 23 on the approval of an Ethereum ETF and whether or not it is a reality. As that date approaches, ETH prices will try to emulate the same enthusiasm that occurred around the Bitcoin ETF.
It will be the ETH ETF proposed by the VanEck company that will test SEC approval. The body will then have to give its verdict for six other suggested ETFs.
Despite the high expectations, there is a possibility that it will not be approved and the SEC will continue to delay the decision. Furthermore, the market moves emulating what happened with the Bitcoin ETF, so there is a bias in believing that exactly the same thing will happen.
Consequently, neither of the two points can be affirmed. As the date approaches and the price reaches new levels, there is the possibility of seeing and studying the viability of possible approval more clearly.
By Leonardo Perez
