Ethereum is currently following the market trend of Bitcoin and continues to maintain above the $1,800 level. This price level is still bullish for the digital asset which is now only around 60% down from its all-time high. However, there is a threat to the stability that the digital asset has enjoyed so far which could send its price spiraling back down toward the $1,000 level.
What Could Send Ethereum Back To $1,000?
This week, the United States Securities and Exchange Commission (SEC) brought lawsuits against top exchanges Binance and Coinbase, with more regulatory action expected to come toward crypto firms as time goes on. But one of the most important parts of the lawsuit was the SEC naming some cryptocurrencies as securities.
The list which the regulator hinted was not exhaustive included the likes of Cardano (ADA) and Solana (SOL), among others. Interestingly, the SEC did not name Ethereum as a security despite the digital asset’s status being a hot topic of debate over the last year.
What’s important about the cryptocurrencies that the regulator named is the fact that they are proof of stake (POS) networks, a mechanism which Ethereum transitioned to back in 2022. This has sparked speculation that while ETH was not listed as a security, it could very well be on the regulator’s radar to do so in the future.
If Ethereum does get listed as a security, the cryptocurrency could become a target for the SEC, which is already in a drawn-out battle with Ripple for the same allegations. When Ripple was sued back in 2020, the asset suffered a massive crash of up to 60% of its value. A repeat of such an event for Ethereum could easily see the digital asset fall to $1,000, and even lower.
However, the SEC has not made any indications of going after Ethereum. Right now, it seems to have its hands full with Ripple, Binance, and Coinbase, all of which have been vocal about fighting the regulator in court as they object to the charges brought against them.
ETH Price Still Holding Firmly
Even amid speculations that Ethereum would end up being classified as a security, the token is still maintaining a bullish outlook in the mid to long-term. It is trading above its 100-day moving average of $1,758, which shows investors’ willingness to purchase the asset at prices higher than they did three months ago.
As long as the bulls continue to maintain momentum, it is possible that ETH could continue to maintain above $1,800 before the next crypto market run-up begins. When this happens, Ethereum could easily clear the $2,000 level.
At the time of writing, ETH is changing hands at a price of $1,839, down 0.35% in the last 24 hours with 1.22% losses on the weekly chart.