Ether’s price has been declining since June 7, when it fell below its $3,800 support level. Despite some positive developments, the price remained below $3,600 on June 19, showing no change for the week.
Analysts believe that the lack of demand from institutional investors and regulatory uncertainty within the Ethereum ecosystem are the primary reasons for this downward trend.
Following Consensys’ victory over the regulator, Noelle Acheson, the author of the Crypto is Macro Now newsletter, expressed surprise at Ether’s lack of positive momentum. She also raised concerns about potential regulatory issues related to staking deterring investor interest.
On June 18, Ethereum ecosystem developer Consensys announced that the United States Securities and Exchange Commission (SEC) had concluded its investigation into Ethereum, its sales, and the company’s role in ETH sales. This announcement coincided with Bitcoin facing rejection near $72,000, as investors grew concerned about the United States’ fiscal health.
Dan McArdle, the co-founder of Case4Bitcoin, noted that as long as the macroeconomic environment remains stable, cryptocurrency appears reasonably priced, and its long-term bullish trend should continue.
Despite potential benefits to cryptocurrencies from worsening macroeconomic conditions in the medium to long term, history has shown that investors tend to withdraw from risk assets when the risk of a recession becomes imminent.
In addition to the recent Consensys development, regulatory news for Ether has been overwhelmingly positive. SEC Chair Gary Gensler confirmed that the launch of U.S. spot Ether exchange-traded funds (ETFs) would occur within three months. However, Ethereum faces its own challenges, including persistently high network processing fees.
Moreover, Ethereum is facing stiff competition in the decentralized application (DApp) space, with competitors such as Solana, Aptos, Celo, and Fantom significantly outpacing its growth.
The recent four days of consecutive net outflows from the spot Bitcoin ETFs raise concerns about whether Ethereum instruments will attract significant inflows as their launch approaches. This indicates that investors are worried about potential issues affecting the Grayscale Ethereum Trust Fund due to its high management fee.
This article does not offer investment advice or recommendations. It is important for readers to conduct their own research before making any investment or trading decisions.