Cryptos Reverse Course: Ethereum (ETH) Under Pressure
If the selloff in Ethereum continues, there may be a few good buying opportunities that come to pass.
Cryptocurrencies are showing duress as the news cycle has once again turned to regulation. Over the past 24-hours, Bitcoin BTC (-8.53%), Ethereum ETH (-13.59%), Ripple XRP (-16.44%), and Litecoin LTC (-16.19%) are all trending south. Announcements from the SEC and U.S. Treasury have crypto traders contemplating a new era of U.S. governmental intervention.
Here is a brief look at the past day’s key stories facing cryptocurrencies:
- SEC: Acting SEC commissioner Gary Gensler made public comments Thursday regarding the prosecution of criminals in the cryptosphere. Gensler said “as we continue to stay abreast of developments, the SEC and FINRA (Financial Industry Regulatory Authority) should be ready to bring cases involving issues such as crypto, cyber, and fintech.” This is a key statement and one that puts crypto exchanges, funds, and traders on notice.
- U.S. Treasury: The U.S. Treasury has issued a declaration that all businesses that have received transfers of more than $10,000 in crypto disclose such activities to the Internal Revenue Service (IRS). Once again, this move signals that sweeping crypto tax enforcement is on the immediate horizon.
Anytime the SEC and U.S. Treasury begins publicly addressing cryptos, investors get skittish. That’s what we are seeing today as most cryptocurrencies have reversed early gains and fallen into the red. One of the big losers has been the red-hot Ethereum, which is now trading beneath $2,500.
Key Support Levels In View For Ethereum (ETH)
The monthly chart below gives us a good look at how crazy May has been for Ethereum. Prices have been all over the board and are now well off monthly highs.
There are three long-term support levels to watch for ETH:
- Support(1): 62% Retracement, 1727.91
- Support(2): Monthly SMA, 1307.50
- Support(3): 78% Retracement, 1006.78
Overview: Right now, it’s anyone’s guess how cryptos will finish in May. However, if the selloff in Ethereum continues, there may be a few good buying opportunities that come to pass. As we head into June’s trade, a bullish bias is warranted toward cryptos but the regulatory landscape is changing.
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