Ethereum Price Holds at $1825 Amidst Crypto Tax Bill
Ethereum (ETH) traded below the $2,000 mark on Thursday, despite a broader market recovery and positive US CPI inflation data. Uncertainty surrounding the recent Pectra network upgrade and a leadership change at the Ethereum Foundation dampened potential gains.
Ethereum (ETH) Underperforms During Market Recovery
While Bitcoin surged 4% above $84,400 and XRP climbed above $2, ETH lagged, failing to gain significant momentum. Concerns about the long-term sustainability and unfinished projects following the March 5th Pectra upgrade contributed to the price stagnation.
US House Votes to Repeal IRS Crypto Tax Rule
The US House of Representatives passed a bill to repeal an IRS rule mandating DeFi brokers report user transactions. This rule, met with opposition from lawmakers worried about its impact on innovation, is now headed to the President's desk for final approval. If passed, this could positively impact ETH, increasing the attractiveness of Ethereum-based DeFi services.
ETH Traders Focus on $1825 Support; Potential for Short Squeeze
Despite the recent price dip, $753 million in leverage was deployed on ETH long positions (vs. $744 million on shorts) according to Coinglass' Liquidation Map. This indicates bullish sentiment and the potential for a short squeeze if the $1,825 support level holds. A sustained break below this level could trigger further declines.
ETH Price Forecast: $2,500 Rebound Possible?
The daily ETH chart shows a persistent downtrend, with short-term moving averages sloping downward. The March 1st reversal marked a significant breakdown. The Bull-Bear Power (BBP) indicator at -393.47 signals strong selling pressure. However, holding the $1,825 support could trigger a rebound towards $2,018 and $2,111. Failure to hold this support increases the risk of a drop to $1,750.
Increased long leverage suggests traders anticipate a bullish reversal. If long positions continue to outweigh shorts, short covering could propel ETH above $2,000, potentially leading to a recovery towards $2,500. However, the situation remains volatile and requires careful monitoring.
Frequently Asked Questions (FAQs)
- Why is Ethereum under pressure? Uncertainty surrounding the Pectra upgrade and concerns about network sustainability are contributing to selling pressure.
- How could the crypto tax bill impact ETH? If the bill repealing the crypto tax rule passes, it could boost DeFi adoption on Ethereum, increasing demand and potentially driving ETH prices higher.
- What is the key support level for ETH? Ethereum needs to hold the $1,825 support zone to prevent further declines and maintain the possibility of a rebound.
Disclaimer: This analysis reflects the author's opinion and is subject to market conditions. Conduct thorough research before investing in cryptocurrencies. The author and Codeum are not responsible for any personal financial losses.
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