Ethereum is in a very dangerous position, with its fate possibly in the hands of the US SEC: is it a security or is it a commodity? Is it decentralized enough?
As the industry realizes itself, Is it now or never for an ETHUSD rally, or is there an increased risk of a catastrophic collapse in the second-largest cryptocurrency by market cap.
Will Carnage Across Crypto cause Ethereum to collapse?
Ethereum and most other altcoins have taken a brutal beating of late, triggered by enforcement actions taken by the US SEC against major crypto exchanges. While Ether has not been listed as a cryptocurrency, the market is skeptical that it is not also listed by the SEC.
Ethereum is not as “safe” as Bitcoin from regulatory scrutiny due to its recent switch to proof of stake. However, it’s arguably decentralized enough, which could become a key measure of what a security does or doesn’t do, according to recent Hinman papers.
The drop from here looks treacherous | ETHUSD on TradingView.com
Why ETHUSD is at a critical turning point
At this point, a technical price bounce in ETHUSD is necessary, or else it could find itself at risk of a complete collapse. That is if the longer-term rising wedge pattern breaks out from this level. Conversely, if the level holds, the upper trend line of the wedge sits at approximately $10,000 per token.
From a risk versus reward standpoint, the stakes are high: new stratospheric all-time highs at some point, or new all-time lows and the worst bear market in Ethereum history. And it all comes down to this pattern.
With so little liquidity in crypto, a cloudy regulatory climate, and economic turmoil everywhere, a negative decision in the loosely related XRP case could ultimately push Ether off the cliff on which it hangs. Meanwhile, the return of risk appetite and a pause in interest rate hikes combined with a positive decision in the XRP case or elsewhere in the SEC drama, could save Ethereum from certain doom.
#ethereal blue team 🔵 or red team 🔴
Answer why you chose your color ⬇️ pic.twitter.com/UTygTqQqWE
— Tony “El Toro” (@tonythebullBTC) June 14, 2023