Source: AMB Crypto

It’s been just two days since the much-anticipated spot Ethereum [ETH] ETF received approval from the U.S. Securities and Exchange Commission (SEC). However, the results of this approval were less than satisfactory, and ETH quickly turned bearish on the charts. Therefore, it’s worth taking a closer look at what happened.

Ethereum did not surge after ETF approval

AMBCrypto previously reported that the U.S. Securities and Exchange Commission (SEC) approved eight Ethereum spot traded funds (ETFs) on May 23. The regulator approved the 19b-4 forms for ETF applications submitted by BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton.

Now, while many expected the price of ETH to surge after this, the opposite has happened. According to data from CoinMarketCap, ETH’s week-long bull rally ended, with its price instead falling by nearly 2% in 24 hours.

Ali, a well-known cryptocurrency analyst, recently shared a tweet saying that there could be many reasons behind this bearish price behavior. According to the tweet, Ethereum saw a sharp sell-off soon after it was approved, which could be a profit-taking behavior by investors. For example, Jeffrey Wilke, one of the co-founders of Ethereum, transferred 10,000 ETH, worth about $37.38 million.

In addition, the supply of Ethereum has also surged on exchanges, further confirming that the token is under heavy selling pressure. In addition to this, a key indicator, TD sequential, has also flashed a sell signal on ETH’s price chart.

However, in one case, the bearish price trend may change. Analyst Ali believes that the resistance level of ETH is between $3,940 and $4,054. According to the tweet, if ETH successfully records a daily candle chart and closes above $4,170, the bearish trend may end.

Will we enter a bear market?

AMBCrypto then analyzed ETH's on-chain indicators to see if they support the possibility of ETH breaking through the above resistance zone. According to our analysis of Glassnode data, ETH's NVT ratio has dropped sharply. The decline in this indicator means that the asset is undervalued, suggesting a price increase on the chart.

However, at the time of the reporter's visit, ETH's fear and greed index value was 67%, which means that the market is in the "greed" stage. Whenever the index reaches this level, it indicates that the probability of a price correction is high. To better understand expectations, AMBCrypto then looked at Ethereum's daily chart.

We found that ETH’s Chaikin Money Flow (CMF) has been moving sideways over the past few days. The Relative Strength Index (RSI) chart also shows a similar trend.

These indicators suggest that investors may witness a few more days of slow movement.