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Ethereum Price Struggles to Recover From Recent Pullback

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Ethereum Price Struggles to Recover From Recent Pullback

The price of Ethereum’s native currency, ETH, experienced a notable drop this week as a result of the correction in Bitcoin. However, the recovery of the coin comes at a slower pace than that of BTC. What should investors expect in the short term?

At the beginning of last March, this token was considered one of the most promising for the current bullish cycle. Among this positive feeling, there were numerous news items that implied greater attraction of capital to the network. The most notable of the items was the possible approval of a spot ETF for the currency on the stock exchange.

In addition, investors and analysts were counting on the recent Dencun update, which allowed a notable improvement in scalability. In that sense, the decrease in network congestion led to a decrease in transaction fees. In theory, the latter is a favorable element for internal trade and for developments in this multipurpose blockchain.

However, the US Securities and Exchange Commission (SEC) poured cold water on this enthusiasm-based push. The regulatory agency hinted that the ETH token could be an unregistered security.

Ethereum price is hovering around the $3200 mark: Source: CoinMarketCap

What to expect from the price of Ethereum in the short term?

Although Ethereum’s price maintains notable long-term potential, some clouds seem to dim the outlook. As already mentioned, the SEC’s recent hints about its alleged security status are the main cause for concern.

If regulators, protected by the change from PoW to PoS, consider ETH to be an unregistered value, the negative implications would be great. Consequently, the Commission would deny approval of several Ethereum spot ETFs on the stock exchange. Thus, the expected influx of institutional capital to this digital currency would be denied.

On the other hand, developers based on the Ethereum virtual machine would also face very uncomfortable moments. This would be the reason that keeps the exchange value of the token below $4,000 per unit. Overcoming this barrier is the main task that the currency has if it really wants to satisfy investors.

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