Despite the negative news, Ethereum continues to look bullish and is trading at $2,500 as of writing during early Asian hours on Friday. In short, the cryptocurrency has remained consistently trading above the $2,450 bullish support level, which aligns perfectly with the 38.2% Fibonacci Retracement. A lot is happening in the Ethereum ecosystem. This creates momentum for advancing the GENIUS Act and continuing discussions on the merits of the CLARITY Act. Network growth has been exponential, with almost 1 million new chodes added per week since the end of May.
Interestingly, despite this positive momentum, Ethereum futures have seen $16.59 million in liquidations in the last 24 hours. Long liquidations amounted to $7.77 million and short liquidations were $8.82 million as the market continues to experience violent volatility. The cryptocurrency's ability to sustain a move above its 200-day Simple Moving Average (SMA) could signal a retest of the key channel's upper boundary resistance. On the other hand, inability to hold the lower line of this channel may cause a major downside break.
GENIUS Act Fuels Ethereum Interest
This recent trend of growth across the Ethereum network is intimately tied to the good news surrounding the Ethereum ecosystem. That’s why the progress of the GENIUS Act is so important. We recommend any stablecoin bill, which has otherwise enjoyed strong bipartisan support in the Senate, tread carefully to not disrupt USD funding mechanisms. If passed, the GENIUS Act would be the first nationwide US crypto-related legislation to be enacted. This historic legislation would mark an incredible accomplishment for the fledgling industry’s progress.
With the potential passage of the GENIUS Act, there has been mounting interest into Ethereum. That’s why so many businesses and banks are jumping into the stablecoin space. This exploration, albeit in its infancy, is being spearheaded by major players including Apple, Amazon, JP Morgan and Morgan Stanley. The GENIUS Act provides important regulatory certainty. Such clarity would greatly accelerate the adoption and integration of stablecoins on the Ethereum network.
This is going to start playing, turning blockchains into infrastructure. And once blockchains become infrastructure that the whole world's powered on, financial infrastructure and a variety of other applications — social, logistics, supply chain, etc. — then ETH becomes like the internet. - Ethrealize co-founder Vivek Raman
Technical Analysis and Key Support Levels
ETH is receiving support at this level by the confluence of the 50-day Simple Moving Average and the Exponential Moving Average. These indicators remain only slightly above the lower boundary of a third important channel. This convergence creates an incredibly strong support zone, strengthening the digital asset’s defense against downward pressure at its current level. A strong defense of this core support base will pave the way for such a move. It might continue to push us toward the channel’s upper boundary ceiling.
Market participants continue to remain leery. If they are unable to defend the lower bound of the key-long term channel, it may open the door for a major multi-year breakdown. That declining volume further fuels that uncertainty. Ethereum now has to hold onto this area or risk seeing a disastrous drop below the level. Traders will be watching these indicators closely to get a read on the cryptocurrency’s short-term direction.
Market Structure and Future Outlook
Lawmakers are still not done arguing over the CLARITY Act, a proposed crypto market structure bill. Between this discussion and the introduction of the GENIUS Act, interest in Ethereum has been growing. Ethereum is by far the most active platform for any crypto market activity after Bitcoin transactions. Yet it’s an area that would greatly benefit from transparency and clearer regulatory guidelines. It is this clarity that the CLARITY Act would provide, helping to further stimulate growth and innovation of the Ethereum ecosystem.
The combination of positive regulatory developments and robust technical support levels create an exciting picture for Ethereum’s near-term future. More sustained network growth could soon be on the horizon. As stablecoins adoption continues to go mainstream, if the US Legislators finally pass crucial legislation Ethereum could soar to new heights. For the cryptocurrency to truly unlock its potential, it must continue to weather extreme volatility and hold support at key levels.
