Why is the Ethereum (ETH) price up today?

The SEC’s decision to stop its investigation into Ethereum, as well as dwindling ETH reserves across crypto exchanges, are key drivers propelling the price of Ether upward today. Ethereum’s native coin, Ether, increased by 4.5% in the last 24 hours, reaching $3,550 on June 19. Surprisingly, the primary driver of this bullish surge is the United States Securities and Exchange Commission (SEC), which has chosen to close its investigation into Ethereum.

SEC ends Ethereum probe ahead of potential ETF approvals

Today’s Ether price rises appear to be in response to the SEC’s decision to close its inquiry into whether ETH is classed as a security. “The Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0,” Ethereum developer ConsenSys said in a June 19 post on X, adding that it’s a “major win for Ethereum developers, technology providers, and industry participants.”

Interestingly, the SEC’s decision comes after it approved the 19b-4 applications from VanEck, BlackRock, Fidelity, and other Wall Street firms, which allow spot Ether ETFs to be listed and traded on their respective exchanges. 

Bloomberg analyst Eric Balchunas expects the Ether ETFs to be available for trading beginning July 2. K33 Research also expects that these investment products will generate $4 billion in inflows within the first five months of debut, demonstrating a substantial underlying demand for ETH tokens shortly.

Ether balance on exchanges plunges to 8-year low

Bloomberg analyst Eric Balchunas expects the Ether ETFs to be available for trading beginning July 2. K33 Research expects that these investment products will draw $4 billion in inflows in the first five months after launch, demonstrating a high underlying demand. According to Glassnode, the total number of Ether owned by all crypto exchanges fell to more than 12.20 million ETH on June 18, the lowest level since July 2016.

The increase in Ether withdrawals from crypto exchanges has coincided with the cryptocurrency’s price rise, indicating less selling pressure and a rising desire for storing ETH in private wallets or decentralized protocols. For example, the official Ethereum staking address has continuously raised its holdings since its introduction in December 2020, presently totaling more than 46.

This expansion continues despite Ethereum’s Shanghai upgrade in March 2023, which removed the obligation for ETH stakeholders to freeze their tokens indefinitely. The fact that most users have not withdrawn their staked ETH, although having the opportunity, demonstrates a preference for the benefits of staking, such as stability and incentives, overselling. This shows a positive outlook for Ether’s price in the following weeks.

ETH price bounces from a support confluence

ETH prices rose today after testing a critical support confluence at roughly $3,500. This confluence includes the 50-day exponential moving average (50-day EMA; the red wave), the 0.5 Fibonacci retracement level, and the lower trendline of its current ascending channel trend. 

Ether’s upward objective for July appears to be the ascending channel’s top trendline, which corresponds to the 1.618 Fib line at around $4,853. This estimate is based on prior rebounds from the lower trendline, which produced comparable price changes. In contrast, a definitive breakdown below the ascending channel’s lower trendline may raise ETH’s chances of falling to its 200-day EMA (the blue wave) at about $3,040 in July.

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