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ETH Price Recovers 5%: SEC Won’t Charge Ethereum 2.0 — Descending Resistance Reached

Published June 19, 2024 3:00 PM

By Nikola Lazic

Ethereum spikes 5% on the positive news, but reaches descending resistance from May 28. The interaction will determine its future outlook.

Key Takeaways

SEC concluded the Ethereum 2.0 investigation with no securities charges.
Ethereum price spiked, testing descending resistance.
Further ETH price movement hinges on breakout direction.

The U.S. Securities and Exchange Commission (SEC) has concluded its investigation into Ethereum 2.0, deciding not to file securities charges against ETH, as reported by Consensys. This decision is a significant victory for Ethereum developers and the broader ecosystem. This news impacted Ethereum’s price positively today and the general market with increases in crypto prices all across the board.

However, after the ETH price spiked 5%, it came to its descending resistance anchored at the May 28 high. Can this new be enough to catalyze a breakout momentum and thus a larger rise?

SEC Concludes Investigation

The investigation, which began in March 2023 after the Ethereum Foundation was reportedly under scrutiny, has been a part of the SEC’s broader efforts to classify Ethereum as a security. This intensified legal uncertainty culminated in Consensys suing the SEC in April, seeking a judicial declaration that Ether is not a security. By late April, reports indicated that the SEC’s Enforcement Division had been actively investigating Ethereum’s status since 2018.

The decision follows a letter we sent on June 7, asking the SEC to confirm that the May ETH ETF approvals, which were premised on ETH being a commodity, meant the agency would close its Ethereum 2.0 investigation.

The closing of the Ethereum investigation is momentous, but it’s…

— Consensys (@Consensys) June 19, 2024

Consensys argued that the recent approval of spot Ethereum ETFs suggested that Ether should not be considered a security. This stance likely influenced the SEC’s decision to close the investigation. While this marks a milestone, Consensys noted that the pursuit for clear regulatory guidelines, particularly regarding services like MetaMask Swaps and Staking, is ongoing as they seek further clarity from the SEC on crypto regulations.

ETH Price Analysis

Ethereum’s price rallied from a descending trendline on May 17, surging 32% to reach $3,800 by May 23 from its May 13 low of $2,870, signaling the onset of a new uptrend. The price nearly hit $4,000 on May 27 but then declined.

ETHUSD | Credit: Nikola Lazic/Tradingview

The price chart shows Ethereum forming a symmetrical triangle from its May 23 peak just below $4,000. As it approached the triangle’s apex, Ethereum faced resistance and eventually broke below the support level, dropping to a short-term low of $3,385 on June 11. It made a lower low of $3,350 on June 18 and formed a descending triangle with its unconfirmed support.

Today’s spike brought the price back to its resistance, and we are about to see if a breakout to the upside occurs or if it will be rejected. This decline from May 28 might mark the end of wave 4, potentially setting the stage for a rally to new highs. If this is true, a breakout will be the first sign of confirmation, and ETH could be set to rally past its March 13 high to the $4,300 area.

However, if we see a rejection, further downside movement could occur. In that case, ETH could revisit its April 13 low of $2,800 if it does not make a lower low.

Disclaimer: Key Takeaways SEC concluded the Ethereum 2.0 investigation with no securities charges. Ethereum price spiked, testing descending resistance. Further ETH price movement hinges on breakout direction. The U.S. Securities and Exchange Commission (SEC) has concluded its investigation into Ethereum 2.0, deciding not to file securities charges against ETH, as reported by Consensys. This decision is a significant victory for Ethereum developers and the broader ecosystem. This news impacted Ethereum’s price positively today and the general market with increases in crypto prices all across the board. However, after the ETH price spiked 5%, it came to its descending resistance anchored at the May 28 high. Can this new be enough to catalyze a breakout momentum and thus a larger rise? SEC Concludes Investigation The investigation, which began in March 2023 after the Ethereum Foundation was reportedly under scrutiny, has been a part of the SEC’s broader efforts to classify Ethereum as a security. This intensified legal uncertainty culminated in Consensys suing the SEC in April, seeking a judicial declaration that Ether is not a security. By late April, reports indicated that the SEC’s Enforcement Division had been actively investigating Ethereum’s status since 2018. The decision follows a letter we sent on June 7, asking the SEC to confirm that the May ETH ETF approvals, which were premised on ETH being a commodity, meant the agency would close its Ethereum 2.0 investigation. The closing of the Ethereum investigation is momentous, but it’s… — Consensys (@Consensys) June 19, 2024 Consensys argued that the recent approval of spot Ethereum ETFs suggested that Ether should not be considered a security. This stance likely influenced the SEC’s decision to close the investigation. While this marks a milestone, Consensys noted that the pursuit for clear regulatory guidelines, particularly regarding services like MetaMask Swaps and Staking, is ongoing as they seek further clarity from the SEC on crypto regulations. ETH Price Analysis Ethereum’s price rallied from a descending trendline on May 17, surging 32% to reach $3,800 by May 23 from its May 13 low of $2,870, signaling the onset of a new uptrend. The price nearly hit $4,000 on May 27 but then declined. ETHUSD | Credit: Nikola Lazic/Tradingview The price chart shows Ethereum forming a symmetrical triangle from its May 23 peak just below $4,000. As it approached the triangle’s apex, Ethereum faced resistance and eventually broke below the support level, dropping to a short-term low of $3,385 on June 11. It made a lower low of $3,350 on June 18 and formed a descending triangle with its unconfirmed support. Today’s spike brought the price back to its resistance, and we are about to see if a breakout to the upside occurs or if it will be rejected. This decline from May 28 might mark the end of wave 4, potentially setting the stage for a rally to new highs. If this is true, a breakout will be the first sign of confirmation, and ETH could be set to rally past its March 13 high to the $4,300 area. However, if we see a rejection, further downside movement could occur. In that case, ETH could revisit its April 13 low of $2,800 if it does not make a lower low.

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About the Author

Nikola Lazic

Nikola Lazic is a cryptocurrency analyst and investor working in the industry since 2017. He holds a bachelor's degree in Sociology, which enables him to better understand the psychology behind the crowd´s positioning. Consequently his preferred analytical tool is Elliott Wave Theory in combination with price action analysis. Combining his experience in trading and investing with knowledge in content writing he strives to bring the most accurate and actionable information. Expertise: Cryptocurrencies, Technical analysis, Elliott Wave Theory, On-chain metrics, Research reports.

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