Ethereum’s
fundamental outlook remains mixed, with protocol development and institutional
accumulation providing support, while the macro environment remains a headwind.
US spot Ethereum ETFs have recently recorded substantial outflows amid
deteriorating risk sentiment.
In the near term, the
geopolitical and macroeconomic picture are likely to matter more for price
action than Ethereum’s protocol upgrade alone. Rising oil prices, persistent
inflation concerns, higher Treasury yields and hawkish Fed expectations continue
to put pressure on the crypto market, so traders will need to see some easing
in those concerns to start positioning for new highs.
The negotiations between the US and Iran remain at a stalemate, and the
Houthis are intensifying attacks on Saudi Arabia, raising supply disruption
risks and supporting oil prices.
Today, the focus will be on the US CPI report. Traders will mainly look
at the core m/m measure as Fed members have been focusing on the monthly pace
of core inflation to determine how many rate hikes will be needed and how
quickly they should tighten policy.
An uptick to 0.3% might
not be enough for the market to fully expect a hike in October, but a jump to
0.4% should do it. In such a case, we will likely see a selloff in Ethereum on
a hawkish repricing. An in-line or even lower than expected figure, on the
other hand, could lead to a short-term relief rally for the cryptocurrency.
ETHEREUM TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Ethereumis trading near the key
support zone around the 2,360 level and the major trendline. We can expect the dip-buyers
to step in around the support and the trendline, with a defined risk below the
trendline, to position for a rally into the 3,400 level. The sellers, on the
other hand, will need the price to break below the trendline to open the door
for new lows and target the 1,900 level next.
ETHEREUM TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can
see that the break below the minor upward trendline led to a selloff as more
sellers piled in on the break to target the 2,360 support. We have also a downward
trendline around the 2,600 level that could act as resistance. If the price
gets there, we can expect the sellers to lean on the trendline, with a defined risk
above it, to position for a drop into the support and the major upward
trendline. The buyers, on the other hand, will want to see the price breaking
higher to pile in for a rally into the 3,400 level next.
ETHEREUM TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can
see the price is consolidating inside a tight box between the 2,485 and 2,535
levels. A break on either side will likely increase the momentum and extend the
moves. From a risk management perspective, though, it would be better to wait
for the US CPI release as we could see big moves in case of surprises. The red
lines define the average daily range for today.
UPCOMING CATALYSTS
Today we have the US CPI
report. Tomorrow, we get the US PPI, the US Retail Sales and the latest US
Jobless Claims figures.
This article was written by Giuseppe Dellamotta at investinglive.com.