Ethereum continues to follow the market trend set by Bitcoin and remains above the $1,800 mark. This price level is still favorable for the digital asset, which is currently only about 60% below its all-time high. However, there is a danger to the stability of the digital asset which could cause its price to fall towards the $1,000 mark.
This week, the US Securities and Exchange Commission (SEC) filed lawsuits against top exchanges, Binance and Coinbase, with more regulatory action expected against crypto firms in the future. One of the significant parts of the lawsuit was that the SEC identified some cryptocurrencies as securities. Interestingly, the SEC did not mention Ethereum as a security, although the status of the digital asset was a hot topic last year.
The crucial thing about the cryptocurrencies mentioned by the regulatory body is that they are Proof-of-Stake (POS) networks, a mechanism that Ethereum transitioned to in 2022. This has led to speculation that while Ethereum was not listed as a security, it could be on the regulator’s radar to do so in the future.
If Ethereum is listed as a security, it could become a target of the SEC, which is already engaged in a lengthy battle with Ripple over the same allegations. When Ripple was sued in 2020, the asset suffered a massive crash of up to 60% of its value. A repeat of such an event could easily happen to Ethereum, leading to the digital asset falling to $1,000 or even lower.
However, the SEC has given no indications that this will be the case with Ethereum. At the moment, it seems to have its hands full with lawsuits against Ripple, Binance, and Coinbase, who are all vigorously objecting to the allegations made against them.
Despite the speculation surrounding the possibility of Ethereum being listed as a security, it maintains a medium to long-term optimistic outlook. The trading price is above its 100-day moving average of $1,758, indicating that investors are willing to buy the asset at higher prices than three months ago. As long as the bulls maintain their momentum, it is possible that ETH could continue to hold above $1,800 before the next upswing in the crypto market.
At the time of writing, ETH is changing hands at a price of $1,839, representing a 0.35% drop in the last 24 hours and a loss of 1.22% on the weekly chart.
