Ethereum finding bids again after the dive

Bullish Reversal in Ethereum (ETH) Despite SEC War on Cryptos

Posted Wednesday, June 7, 2023 by
Skerdian Meta • 2 min read

Cryptocurrencies have been retreating since April, including Ethereum (ETH), but this digital coin has been holding up better than other major cryptos. The second leading cryptocurrency was initially finding support at the 50 SMA (yellow) on the daily chart, while after the next leg lower the 100 SMA (green) came into play.

The price bounced off that moving average which acted as support, but on Monday we saw a dive lower, with buyers testing the 100 SMA again after the SEC accused Binance of mishandling customer funds, providing false information to regulators, and misleading investors about operational safeguards.

The specific allegations include Binance mixing customer funds and covertly transferring them to a separate company controlled by Changpeng Zhao, the founder of Binance. These charges from the SEC contributed to the significant decline in value that day and Ethereum dipped below $1,800, piercing the 100 SMA. Yesterday SEC sued Coinbase for operating as an unregistered broker, to continue the war on cryptocurrencies.

From the complaint:

  • SEC says Coinbase has operated as an unregistered broker since at least 2019
  • Crypto assets that Coinbase makes available put Coinbase’s operations ‘squarely within the purview of the securities laws’
  • Coinbase’s staking program includes five stackable crypto assets, making the staking program an investment contract and therefore a security
  • Coinbase has never registered as a broker, avoiding the disclosure scheme for securities markets
  • Full complaint

SEC Chairman Gary Gensler also stated that tokens are considered speculative investment vehicles.

Comments from Gary Gensler on CNBC

  • Tokens are speculative investment vehicles
  • It takes time to build a case, we do things by the book
  • Exchanges are commingling a number of functions
  • Platforms offer a web of deceptions, with some individuals trying to evade law
  • The public would be aghast if they found out the NYSE was also running a hedge fund
  • One sector running around like the wild west undermines trust in all US capital markets
  • Binance sister organizations boosted volumes and corrupted the market

 

Ethereum Daily Chart – The 100 SMA Held as Support

ETH bouncing above the 50 SMA now

But buyers came back and now ETH/USD is showing a reversal pattern as the weekend approaches. Ethereum (ETH) formed a bullish candlestick yesterday, which almost engulfed Monday’s candlestick. These candlestick patterns often indicate a potential bullish continuation. However, for Ethereum to confirm this, it needs to surpass the resistance level of $1,930 initially. If Ethereum manages to break above this resistance, it could potentially reach the price level of $2,150, which has not been seen this year.

On the other hand, if Ethereum fails to break the resistance, it may experience a retracement towards the support level at $1,840. Given the expectation of limited price action over the weekend, Ethereum bulls will aim to build momentum during this time. As of now, Ethereum (ETH) is trading at $1,904, with a 0.47% gain over the last 24 hours.

ETH/USD
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