FUNDAMENTAL OVERVIEW
Ethereum faced some
strong selling pressure yesterday after expectations for the Clarity Act
cloture vote deteriorated ahead of the Senate vote. The vote ultimately failed,
as reported here. With Congress likely to become even more divided
following the midterm elections, there is little prospect of comprehensive
crypto market structure legislation moving forward again this year. The
regulatory setback added to the pressure on Ethereum, which briefly spiked to
the key $2,360 support.
The attention now
turns back to the macro backdrop, with today’s FOMC decision being the next
major catalyst. The reaction could be significant if the Fed’s decision differs
from what markets are currently expecting. The
consensus is for a 25 bps rate hike, with one or two dissenting
policymakers favouring no change. This meeting will also bring the latest
Summary of Economic Projections (SEP) and Dot Plot.
The focus will be
mainly on the Dot Plot, with the Fed expected to signal two additional rate
hikes, one in 2026 and another in 2027. That would still imply a less
aggressive path than current market pricing, which reflects three additional
hikes through the end of 2027. Fed Chair Warsh is not expected to provide forward
guidance and should instead reiterate the message
delivered at Jackson Hole.
A projection for
three or more additional hikes would represent a hawkish surprise and could put
further pressure on Bitcoin. On the other hand, if the Fed signals only one or
two additional hikes, markets could interpret the outcome as dovish,
potentially providing support for Ethereum.
The Middle East developments
will also remain in focus. Oil prices continue to trade above $100, keeping
inflation concerns elevated as disruptions worsen. Oil prices have been a major
driver of broader market moves recently, meaning any signs of de-escalation in
the Middle East could push oil lower and trigger a dovish repricing. That could
ultimately provide a positive catalyst for Ethereum.
For now, the macro
backdrop remains a headwind and should continue to limit Ethereum’s upside. A
meaningful shift would likely require either signs of de-escalation in the
Middle East or a dovish FOMC outcome, which could create the conditions for Ethereum
to break out of the monthly range and reach new highs.
ETHEREUM TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Ethereumprobed above the 2,560
resistance two times but failed to sustain the breakout and eventually dropped
all the way back to the 2,360 support. We can expect the buyers to continue to step
in around the support with a defined risk below it to keep targeting a break
above the resistance. The sellers, on the other hand, will want to see the
price breaking below the support to pile in for a drop into the major upward trendline
around the 2,100 level.
ETHEREUM TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can
see more clearly the rangebound price action we’ve been experiencing for almost
a month. The market participants will continue to play the range by buying at
support and selling at resistance until we get a breakout on either side.
ETHEREUM TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have a minor resistance zone around the 2,460 level. If we get a pullback into
the minor resistance, we can expect the sellers to step in there with a defined
risk above it to position for a drop back into the support targeting a
breakout. The buyers, on the other hand, will look for a break higher to extend
the rally into the major resistance.
UPCOMING CATALYSTS
Todaywe have the FOMC rate decision. Tomorrow,
we get the US Jobless Claims figures. Traders will also keep a close eye on
developments in the Middle East.
This article was written by Giuseppe Dellamotta at investinglive.com.