Ethereum price ranges below $3,700 as debate over its security status reaches US Congress

Some US Congress members have asked Gary Gensler-led Securities and Exchange Commission (SEC) for answers on the security status of the largest altcoin, Ethereum (ETH). As  special purpose US broker-dealer, Prometheum Inc, intends to begin a crypto custody operation and hold users’ Ether, influential House Republicans have demanded the SEC to give them an answer on how to legally handle the altcoin. 

Congress demands to know whether Ethereum is a security

The SEC is known for its ambiguous stance on cryptocurrencies as the regulator’s legal battles against Ripple and other crypto-related firms like Coinbase rage on. The SEC has been asked how a US special purpose broker-dealer should legally handle Ether. 

If the SEC assigns Ether a security status, it would have a longstanding impact on the DeFi and crypto ecosystem, smart contract projects on the Ethereum blockchain and ETH holders. 

A total of 48 Congress members addressed a signed letter to SEC Chair Gary Gensler, expressing their concerns on the altcoin’s treatment as a security. 

Letter from the US Congress.

The US Commodity Futures Trading Commission (CFTC) has classified Ethereum as a commodity in the past. In a March 6 hearing before the House Committee on Agriculture, CFTC Chairman Rostin Behnam testified that both Bitcoin and Ethereum are securities. Behnam was commenting on the SEC’s stance in the case that involved Prometheum Inc. 

Technical analysis: Ethereum price trades sideways below $3,700

Ethereum price is currently trading sideways below the $3,700 mark as the crypto community awaits the SEC’s decision on whether Ether is a security. ETH price is stuck between the 78.6% and 38.2% Fibonacci placeholder of the decline from the year-to-date peak of $4,093.92 on March 12 to the March 20 low of $3,056. 

ETH price is likely to consolidate within this range until there is clarity on the SEC’s stance on Ether. The Moving Average Convergence/ Divergence (MACD) is flashing a bearish signal, with red bars below the zero line, signaling negative momentum in Ethereum. 

Meanwhile, the Relative Strength Index (RSI) is close to the neutral zone. 

To the downside, Ethereum price could revisit the $3,000 level and collect liquidity before another leg up. This largely depends on Bitcoin price action as both coins are highly correlated: if BTC price slips below $70,000 and shows weakness, ETH could face a correction as well. 

ETH/USDT 1-day chart 

However, if bulls push Ethereum’s price above $3,575 and there is a daily candlestick close above this level, which aligns with the 50% Fibonacci placeholder, the bearish thesis could be invalidated. In such a case, the altcoin could target the year-to-date peak and weekly resistance at $4,093.92, posting nearly 14% gains from the current price levels.