Ethereum Sees Resistance Under $2000 Despite Stock Rally

Ethereum Sees Resistance Under $2000 Despite Stock Rally

According to Mike McGlone, Senior Macro Strategist for Bloomberg Intelligence, Ethereum (ETH) is currently trapped under the $2000 price point. Despite a stock rally, ETH has failed to sustain itself above that price, leading McGlone to believe that $2000 is a “resistance ceiling”. The NASDAQ 100 stock index tapped a 52-week high in Q2, but this did not push ETH past this barrier. McGlone believes that the token may depend on the stock index to lift all boats and break the 12-month-long resistance level.

Historically, there has been a strong correlation between cryptocurrencies and high-beta tech stocks. This correlation was especially true in June 2022 when both asset classes suffered under macroeconomic pressure, and ETH lost its $2000 level. Investors have often compared Ethereum and altcoins to tech securities from an investor’s point of view. Bill Miller, a famous investor known for outperforming the stock market for over a decade, said last year that investors should view altcoins as “venture assets”. Alternatively, he and others including Paul Tudor Jones have likened Bitcoin to “digital gold” as a safe haven asset, inflation-hedge, and form of resistance to bank failures.

Bitcoin’s Influence on Ethereum’s Price

Bitcoin’s correlation to gold has increased in recent months after both assets surged in the aftermath of numerous bank collapses in March, while its correlation to stocks has declined. Given Bitcoin’s influence over the price of ETH and other assets, this could help explain why a tech stock rally has not led ETH to surge alongside it.

Crypto Price Pressure After SEC Lawsuits

This week, the crypto market has also suffered price pressure after the U.S. Securities and Exchange Commission (SEC) targeted two of the world’s largest crypto exchanges, Binance and Coinbase, with lawsuits. Both Bitcoin and Ethereum have fallen 1.5% on the week, while other coins like Solana (SOL) and Cardano (ADA) have fallen 10% and 12% respectively. The latter two coins were explicitly named as securities in the SEC’s Coinbase lawsuit, suffering a price fall similar to XRP in 2020 as a result. While Ethereum wasn’t among the crypto assets to be classified as securities, the SEC has implied numerous times that it could fit the bill.

Ethereum is facing a resistance level under $2000 despite a stock rally. The token may depend on the stock index to break its 12-month-long resistance level. Investors often compare Ethereum and altcoins to tech securities, while Bitcoin is likened to “digital gold”. Bitcoin’s increasing correlation to gold could explain why a tech stock rally has not pushed ETH past $2000. The crypto market has also seen price pressure after SEC lawsuits targeted Binance and Coinbase, with Solana and Cardano suffering significant price falls.


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