FUNDAMENTAL OVERVIEW
Ethereum and other major cryptocurrencies rallied on
Friday after a CFTC
crypto rulemaking submission on Thursday became public.The filings were submitted for
regulatory review after the CLARITY Act failed to advance in the Senate earlier
in the week.
The CFTC has effectively signalled that it intends to
move forward with a crypto market framework using its existing authority rather
than waiting for Congress. Following the news, Ethereum broke out of its month-long
range, opening the door for a rally into the $3,000 level.
On the macro side, the market’s focus is
now on tomorrow’s UN General Assembly, as Trump called a meeting with Gulf
leaders on the sidelines to discuss the next steps in the war with Iran. The
Iranian delegation was also allowed to participate in the Assembly, so there
will likely be a meeting between Trump and Iranian President Pezeshkian.
Keep in mind that a de-escalation would send oil prices lower, further
easing inflation and rate hike concerns and ultimately support risk sentiment
and cryptocurrencies.
Economic data will also be important given the current market’s pricing.
When positioning and market expectations become stretched, even a modest shift
in the data can trigger a significant reversal. If US data starts surprising to
the downside, expectations for aggressive rate hikes will likely be reduced, giving
Ethereum an additional boost.
ETHEREUM TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Ethereumfinally broke out of the
month-long range and extended the gains into new highs. The natural target for
the buyers should be the resistance zone around the 3,400 level. If we get
there, we can expect the sellers to step in with a defined risk above the
resistance to position for a drop into new lows. The buyers, on the other hand,
will look for a break higher to increase the bullish bets into new record
highs.
ETHEREUM TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can
see more clearly the breakout of the range and the retest before another leg
higher. If we get another pullback into the resistance-turned-support around
the 2,560 level, we can expect the buyers to step in with a defined risk below
the support to position for a rally into new highs. The sellers, on the other
hand, will want to see the price falling back below the support to pile in for
a drop into the 2,360 level next.
ETHEREUM TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have an upward trendline defining the bullish momentum. If we get a pullback,
we can expect the buyers to lean on the trendline with a defined risk below it
to keep pushing into new highs. The sellers, on the other hand, will look for a
break lower to extend the pullback into the 2,560 support.
UPCOMING CATALYSTS
Tomorrow, we have Trump meeting
with Gulf leaders and potentially with Iran’s President at the UN General
Assembly. On Wednesday, we get the Flash US PMIs. On Thursday, we have the
Trump-Xi meeting.
This article was written by Giuseppe Dellamotta at investinglive.com.