Ethereum Faces Persistent Downtrend Despite Positive News: Is the Market Logic Shifting?
Despite a series of favorable developments, Ethereum’s price has continued its downward trend recently.
Since losing the $3,800 support level on June 7, Ether has remained under pressure, with its price currently below $3,600.
On June 18, Ethereum ecosystem developer Consensys announced that the U.S. Securities and Exchange Commission (SEC) had concluded its investigation into whether Ethereum could be considered a security and Consensys’ role in the sale of ETH.
Noelle Acheson, author of the “Crypto is Macro Now” newsletter, expressed surprise at Ethereum’s lack of positive momentum following Consensys’ regulatory victory. She also questioned whether other regulatory issues could be dampening investor interest.
Some analysts believe the main reason for the bearish trend is the lack of institutional demand for cryptocurrencies. Others attribute it to regulatory uncertainty within the Ethereum ecosystem.
Despite regulatory clearance, risks within the Ethereum ecosystem persist.
Analysts also note that the current lack of interest in Ether may reflect growing investor concerns about a potential economic downturn.
In the medium to long term, a deteriorating macroeconomic environment could potentially benefit cryptocurrencies. However, historical experience indicates that when recession risks loom, investors tend to withdraw from risk assets. The yield on the U.S. two-year Treasury note dropped from 4.94% on May 30 to 4.71%, suggesting that investors are actively buying these fixed-income instruments.
Dan McArdle, co-founder of crypto company Case4Bitcoin, points out that as long as the macroeconomic environment remains stable, cryptocurrency prices will appear reasonable, and their long-term bullish trend should continue. However, McArdle warns that a “macro shock” or a significant pullback in the S&P 500 will negatively impact cryptocurrencies in the short to medium term.
In addition to the recent Consensys event, Ethereum has received other positive regulatory news. SEC Chairman Gary Gensler confirmed that a U.S. spot Ether exchange-traded fund (ETF) would be launched within three months.
