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After one very long ride, Ethereum (ETH) has finally breached the psychologically important $3,000 price mark. While this calls for celebration, investors are advised to exercise caution as headwinds lie ahead.
Ethereum market headwind not cleared
Despite its strong correlation with Bitcoin, Ethereum’s price outlook in this current bull cycle has been somewhat disappointing. While Bitcoin soared to its all-time high (ATH) and set a new one above $73,000, Ethereum traded above 40% below its ATH.
The $3,000 price level has been a major bane for Ethereum over the past month. From at least April 17, Ethereum has made at least six attempts to surpass the $3,000 resistance but was always rejected at each point.
At the time of writing, the coin is changing hands for $3,051.63; however, it is down by 1.27% in the past 24 hours.
From a low of $2,925.09, Ethereum outwitted the bears to attain its current level, a point that might not hold now. The general market optimism surrounding Ethereum is bearish, with the trading volume down 11.92% to $13,653,971,007.
On thin ice
Ethereum is passing through a major litmus test that might either make or mar its valuation moving forward. While it remains unclear what triggered the shoot-up in the price, the drawdown is explainable.
This is because the United States Securities and Exchange Commission (SEC) plans to designate Ethereum as a security. This is projected as the basis for which the regulator might deny several applications for spot Ethereum ETFs.
The industry is currently divided on the likely disposition of the U.S. SEC regarding this offering; however, experts’ general consensus is that the approval odds are reasonably down. If the SEC says no to an Ethereum ETF, it might trigger a ripple effect in a price slump overall.