- SEC may have confirmed that Ethereum is not a security following eToro’s settlement.
- Ethereum is seeing high selling pressure from investors as exchanges witness 91.4K ETH inflows.
- Ethereum could rally toward $3,360 if it breaks above the upper trendline of a falling wedge with high buying pressure.
Ethereum (ETH) is up 0.5% on Thursday following speculation that the Securities & Exchange Commission (SEC) confirmed that the top altcoin is not a security. Meanwhile, ETH is experiencing high exchange inflows, indicating rising selling pressure among investors.
Daily digest market movers: SEC’s potential Ethereum admission, exchange inflows
Crypto community members are speculating that the SEC conceded that Ethereum isn’t a security following its settlement with crypto exchange eToro. The exchange removed tokens the SEC deemed as “investment contracts” from its platform, allowing users to trade only Bitcoin, Bitcoin Cash and Ethereum.
Considering the SEC didn’t include Ethereum among the list of tokens it asked eToro to delist, many concluded that it’s a confirmation that the number one altcoin is not a security.
“They [SEC] just conceded ETH is not offered as an investment contract security in secondary markets,” said Paul Grewal, Coinbase’s chief legal officer.
On the heels of the news, Hong Kong digital asset manager Metalpha potentially resumed its Ethereum selling spree after depositing 6,999 ETH worth $16.4 million to Binance in the past few hours, per Lookonchain. The asset manager has depleted its ETH holdings in the past six days by 62,588 ETH worth $145.1 million. The company still has 23.5K ETH worth $55 million to initiate further selling pressure.
Ethereum exchange net flows show that Metalpha isn’t the only entity potentially selling its ETH tokens. In the past 24 hours, exchanges recorded over 91.4K ETH in net inflows, per CryptoQuant’s data.
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ETH Exchange Net Flow
Exchange net flows is the difference between coins flowing in and out of an exchange. Unlike exchange-traded funds (ETF), crypto exchange inflows indicate high selling pressure and vice versa for outflows.
Meanwhile, Ethereum ETFs saw mild net outflows of $500,000 on Wednesday. Notably, Grayscale’s ETHE recorded a second consecutive day of zero flows — the first time since ETH ETF’s launch.
ETH technical analysis: Ethereum needs to break out of falling wedge to kick-start rally
Ethereum is trading around $2,350 on Thursday, up 0.5% on the day. In the past 24 hours, ETH has seen $14.73 million in liquidations, with long and short liquidations accounting for $9.98 million and $4.75 million, respectively.
On the 4-hour chart, Ethereum is trading within a falling wedge, represented by an upper descending trendline from July 31 and a lower trendline from August 7. If ETH breaks above the upper trendline of the wedge with increased volume, it could see a massive rally toward the $3,366 level. A potential confirmation of the bullish move will be a retest of the trendline as a new support level.
ETH/USDT 4-hour chart
On the way up, ETH faces a key resistance around the $2,817 level. A breakout above this level could strengthen the bullish move as it served as a key price support for over four months.
The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are just above their neutral levels, indicating slight bullish momentum.
A daily candlestick close below the $2,111 price level will invalidate the bullish thesis.
In the short term, ETH could rise to $2,388 to liquidate positions worth over $32 million.
Cryptocurrency metrics FAQs
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
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