Ethereum’s Critical Week Ahead: Spotlight on ETF Decision and Key Support Zone

• Critical Juncture: Ethereum is at a critical juncture, currently hovering above the psychological level of $3,000 and showing signs of support above the 200-day EMA channel, which has been tested twice since the start of May.
• Sideways Consolidation: Ethereum has been moving sideways for the past month, oscillating between a high of $3,333 and a low of $2,820. It remains above the 200-day EMA channel but below the 45-day EMA channel, indicating bearish momentum in the medium term but a potential accumulation area for the long term.
• Comparative Underperformance: Ethereum has not seen the same significant increase that Bitcoin has over the last 12 months, with Bitcoin up 150% compared to Ethereum’s 68%. This disparity is evident in the ETH/BTC pair, which is at a two-year low. Ethereum’s price has been on a downward trajectory since its rejection from the $4,085 level in March 2024, now down 25% from that high and 38% from its all-time high of $4,940. It has been trending lower inside a large descending channel since mid-March without breaking out in either direction.
• Key Technical Level: The market is currently testing the important zone between $2,800 and $3,000, significant not only for being a round number and aligning with the 200-day EMA, but also as it marks the 50% level between the all-time high of November 2021 and the three-year low of June 2022 at $930, placing the current price in the middle of the range of the past three years.
• Bullish Reversal Pattern: A double bottom bullish reversal pattern above $2,880, signals initial buying pressure and shifts the short-term outlook to bullish. The market is currently challenging short-term resistance at $3,050. Overcoming this level would open the way towards the daily resistance zone between $3,200 and $3,300, which is currently defending the downward momentum in the medium-term. A successful breach above this threshold would be a significant development, as it would signal a shift to bullish momentum on the daily chart and likely attract further buying attention.
• Key Daily Levels: As Ethereum remains between key daily resistance and support above $2,880, sideways consolidation could continue as the market awaits the next catalyst. A break below key support would signal a strong bearish move, likely leading to a deeper long-term correction.
• Upcoming ETH ETF Decision: The upcoming ETH ETF decision expected on May 23rd could revive interest in Ethereum. A positive outcome could trigger significant interest, improving long-term prospects as institutional funds gain access to Ethereum-only investment vehicles. Conversely, delays or rejections could prolong the sideways consolidation as the market looks to the broader crypto market for further catalysts.
• Attention on Pivotal Levels: Monitoring key levels is crucial over the next week as rumours about the ETF decision start to circulate. Market behaviour at these levels can indicate where momentum may accelerate, as they are likely to be pivotal in providing clues for the short-term price direction. Uncertainty is likely to persist in anticipation of the SEC’s decision on May 23rd, potentially capping sustained bullish moves in the near term.

ETHUSD Daily Chart

ETHUSD 4 Hour Chart

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