Ethereum’s future looks uncertain, caught between bullish and bearish forces

The future of crypto assets has always been governed by uncertainty and instability given the numerous factors influencing their price performance and trajectory. Everyone knows it’s common for digital currencies to perpetually waver between spikes and slumps, and big names like Bitcoin and Ethereum make no exception in this regard, despite being in the market for a longer period of time and garnering more trust from traders and investors. 

Contrary to what most people believe, crypto trends are not always well-defined and easy to spot, as is the case with Ethereum at the moment. The main altcoin has been sending mixed signals lately, standing at a crossroads between bearish and bullish forces. While certain metrics are leaning positive, other developments indicate further challenges on the horizon for Ethereum. This makes it all the more difficult for analysts to anticipate future movements and cast an ETH price prediction that comes as close to reality as possible. 

So, let’s take a moment to decipher Ethereum’s current struggles and analyze its market outlook for the months to come.  

Recent price performance

Unlike its bigger brother Bitcoin which managed to hit a new all-time high this year and bounced back above $60K after a previous decline, Ethereum’s performance was nowhere near as impressive. Although the coin registered a 4% increase in the last week, its price chart indicates a 14% drop over the past month. At the time of writing, Ethereum was trading at $2,990, with a market cap of $359.17B USD.

Nonetheless, if we look further back in time, we can see that the altcoin achieved Year-to-Date (YTD) gains of approximately 33%, suggesting an overall positive market sentiment. So, even though Ethereum is still stuck under the $3K threshold and the short-term price action leans bearish, the largely positive general sentiment can blow wind in Ethereum’s sails and keep the asset above the water. 

In other good news, Ethereum products also saw inflows worth $30 million these past weeks, following the launch of the first Bitcoin and Ethereum spot ETFs in Hong Kong. Furthermore, if Ethereum can break above $3K again, there’s a good chance for a new bullish trend to take shape and push the coin up in the price chart, possibly to $3,200 or even higher. 

On the other hand, if Ethereum continues to stagnate and hover around the $2900-$3000 price range for longer, the bullish pressure might prevail and push the asset down to $2,800 or lower. It would be much harder for Ethereum to recover after such a steep decline, highlighting the critical role these potential price movements could play in Ethereum’s short-term performance. 

The long road to spot Ether ETFs 

Another factor with a major influence on Ethereum’s future price trajectory is the SEC’s decision on spot Ether ETFs. Back in January, the U.S. Securities and Exchange Commission made a historic move by giving the green light for the listing and trading of the first batch of spot Bitcoin exchange-traded funds from major asset managers like BlackRock, Grayscale, and Hashdex. 

These funds provide mainstream investors with a new venue that allows them to invest in Bitcoin without the complication of holding the assets. On top of that, the involvement of major financial companies in the provision of crypto products gives digital assets more legitimacy. Unsurprisingly, the event caused quite a stir in the crypto market, in a good way, leading to a considerable spike in the Bitcoin price.

After the passing of this major milestone, crypto analysts and enthusiasts assumed that the approval of spot Ether exchange-traded funds is likely to follow as the SEC would have no reason to reject these applications. Several asset managers, including Grayscale and BlackRock, have already expressed their interest in providing spot Ethereum ETFs to their clients and have submitted their applications with the US regulator in this respect. 

However, the journey to spot Ether ETFs appears to take longer and be a bit more complicated than expected. The SEC has made no secret of its reluctance regarding spot crypto ETFs due to the risks they carry and delays in reviewing and ruling on applications have become somewhat customary. The agency has already postponed its decision on applications from Grayscale, Franklin Templeton, VanEck, and BlackRock, and more recently it has done the same with Invesco Galaxy’s proposal for a spot Ethereum ETF, pushing the deadline to July 5. 

In an official statement, the regulator explained they require more time to carry on a thorough review of the proposal and the issues it might imply so they can come up with a final decision. While the process is not unusual and investment companies have dealt with similar delays for spot Bitcoin ETFs in the past, the news dampened investors’ spirits and caused optimism for spot Ether ETF products to plummet. According to some analysts, the chances for spot Ethereum ETFs to receive the seal of approval from the US SEC in the weeks to come have dropped from 70% to 25%. 

As expected, these delays are bound to have a negative impact on Ethereum’s trading activity. The longer it takes for the SEC to authorize the launch of these crypto funds, the harder it’s going to be for Ethereum to find stability. This means that the altcoin leader may face further volatility in the near future until the uncertainty surrounding spot Ether ETFs clears out. 

Wrapping up 

For the time being, Ethereum continues to navigate murky waters, with recent metrics providing a mixed picture of bullish and bearish signals. This should serve as a warning for investors to be extra cautious when devising their strategies and keep a close eye on market data before making a move.