Ethereum (ETH) appears to be stuck below $2,000 after a stock rally failed to push it past the price point, according to Mike McGlone, a senior macroeconomic strategist at Bloomberg Intelligence.
This is what the analyst believes Ethereum needs to break the 12-month resistance level.
Ethereum’s greatest resistance
in a cheep On Thursday, McGlone said that $2000 looks like a “resistance ceiling” given that ETH has failed to hold above it, despite the NASDAQ 100 stock index hitting a 52-week high in Q2.
Historically, the correlation between cryptocurrencies and high-beta tech stocks has been strong. This was especially true in June 2022, when both asset classes crashed under macroeconomic pressure and ETH lost its $2,000 level.
divergent weakness and #ethereal$2,000 maximum limit –
Ethereum’s inability to stay above $2,000 despite a 52-week high on the #Nasdaq The 100 stock index in Q2 may herald a resistance ceiling for the crypto. The token can rely on the stock index to lift all the boats. pic.twitter.com/Q5dBSo4fTo—Mike McGlone (@mikemcglone11) June 8, 2023
“The token may rely on the stock index to lift all the pots,” McGlone added.
In addition to their concrete correlation, investors have often compared Ethereum and altcoins to tech stocks from an investor’s point of view.
Bill Miller, for example, a celebrity investor known for outperforming the stock market for more than a decade, said last year that investors should view altcoins as “risky assets.” Alternatively, he and others, including paul tudor jones have likened Bitcoin to “digital gold” as a safe-haven asset, a hedge against inflation, and a form of resistance to bank failures.
Bitcoin’s correlation to gold has risen in recent months after both assets have risen following numerous bank collapses in March, while their correlation with stocks has declined. Given Bitcoin’s influence on the price of ETH and other assets, this could help explain why a rally in tech stocks has not led ETH to rise along with it.
regulatory pressure
Crypto has also come under price pressure this week after two of the world’s largest crypto exchanges, Binance and Coinbase, were the subject of lawsuits by the US Securities and Exchange Commission (SEC).
Both Bitcoin and Ethereum are down 1.5% on the week, while other coins like Solana (SOL) and Cardano (ADA) are down 10% and 12% respectively. The last two coins were explicitly named as securities in the SEC. Coinbase Lawsuitsuffering a price drop similar to XRP in 2020 as a result.
While Ethereum was not among the crypto assets that were classified as securities, the SEC has implicit numerous times that could fit the bill.
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