Ethereum price eyes $2,000 despite facing trouble from multiple directions

• Ethereum price indicators point toward a bullish outlook as the downtrend is losing strength.
• Over the past week, Grayscale and Bitwise both pulled their ETH futures ETF requests.
• The meme coin hype resulted in the average transaction fees on Ethereum hitting 2023 highs of $27. 

Ethereum being the home of Decentralized Finance (DeFi), has more use cases than most of the top cryptocurrencies, including Bitcoin. Such utility also attracted flak from not just users but also regulatory bodies, resulting in the Ethereum price finding it difficult to recover. However, that is not the case this time around.

Ethereum use cases could see some slowdown

Ethereum has been an important focus of the regulatory agencies after Ripple and XRP. While the Securities and Exchange Commission (SEC) has claimed that anything other than Bitcoin is a Security, its Chair Gary Gensler, in a video from one of his MIT lectures, claimed that Ethereum is not a security.

This has left a huge regulatory clarity hole in the space that has made investors cautious.

To add to that, earlier on May 17, Grayscale and Bitwise both pulled out of their plans to issue ETH futures exchange-traded funds (ETF). While Grayscale did not provide a reason for the move, Bitwise, in its withdrawal filing, noted,

"The Trust no longer intends to seek effectiveness of the Fund and no securities of the Fund were sold, or will be sold, pursuant to the above-mentioned Post-Effective Amendment to the Trust's Registration Statement.

Furthermore, the SEC's comments of regulation potentially taking years to develop have added to retail and institutional investors' concerns. This is because the regulatory body stated that it would still continue to follow its "regulation by enforcement" policy. 

This leaves ETH the most vulnerable to skepticism owing to its presence in the market as the home of DeFi. Kraken's staking services were shut down earlier this year, particularly due to the SEC's recent crackdown on staking, which is the primary consensus method employed by the Ethereum blockchain.

To add to that, PEPE has made it more troublesome for Ethereum to onboard investors as the meme coin hype pushed the average transaction cost to more than $20. This comes days after the cost was pushed to 2023 highs of nearly $27.

Ethereum average transaction cost

All these instances may look like they could hold a bearish impact on Ethereum price, but they actually won't.

Ethereum price to maintain its eye on the target

Ethereum price is still exhibiting bullish signs thanks to the broader market conditions slightly improving following a sideways movement. Such price action is generally indicative of an incoming rally, which would act as a recovery for ETH.

This makes $2,000 the next target for the Ethereum price. This is because not only is this price point a psychologically important level, but it also coincides with the 50% Fibonacci retracement line of $2,120 to $1,795 retracement.

At the moment, even though the Parabolic SAR's presence above the candlesticks suggests an active downtrend, the Average Directional Index (ADX) below 20.0 indicates that the bears holds little strength. 

ETH/USD 1-day chart

However, if the altcoin did decline due to excessive bearish environmental factors, it would still not push the Ethereum price below $1,699 as it coincides with the 200-day EMA, making it a crucial support level.