Ethereum tumbled
yesterday following the hotter than expected US Core CPI, with a broader
risk-off sentiment in the crypto market adding to the pressure.
The limited
changes in rate hike expectations and the dovish repricing further out the
curve, though, suggest that markets might be getting increasingly more
concerned about the growth outlook.
If these
expectations get confirmed by deteriorating economic data, Ethereum could
remain under pressure as traders will likely reduce exposure to risk-sensitive
assets like cryptocurrencies.
On the positive
side, Interactive Brokers launched Ethereum staking for eligible US clients on October
13, broadening access to staking rewards. Meanwhile, Ethereum’s Glamsterdam
upgrade is progressing through testnet development, focused on increasing
network capacity and improving transaction processing. These developments,
though, are longer-term and are unlikely to offset the macro-driven negatives
in the short term.
Looking ahead, we
have the Flash PMIs, the FOMC, US–Iran negotiations and the US midterm
elections as potentially strong catalysts. Deteriorating economic data could
increase concerns about growth, further weighing on risk sentiment and
Ethereum.
What could change
the picture completely would be an end to the US–Iran war, as that would ease
inflationary pressures, improve the growth outlook and likely support a broader
recovery in risk assets, including Ethereum.
ETHEREUM TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Ethereumis trading around the key
2,360 support zone and the major trendline. We can expect the dip-buyers to
step in around these levels, 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, since
the price made a new lower low, we now have a downward trendline defining the
bearish momentum. If we get a pullback into the downward trendline, we can
expect the sellers to lean on it, with a defined risk above it, to keep targeting
a break below the major upward trendline. The buyers, on the other hand, will
want to see the price breaking higher to increase the bullish bets into new
highs, with the 2,570 level as the first target.
ETHEREUM TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can
see the price broke below the tight box yesterday following the US CPI report
and extended the drop as more sellers piled in to target the 2,360 support and
the trendline. There’s not much we can add here as the buyers will have a
better risk to reward setup around the support and the major upward trendline,
while the sellers will need a break below the upward trendline to open the door
for new lows. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we get the US PPI, the
US Retail Sales and the latest US Jobless Claims figures. We have also Fed
Chair Warsh speaking very late in the day in a fireside chat with IMF Managing
Director Georgieva. He’s against forward guidance, so he’s unlikely to give any
policy signal, but it’s worth keeping an eye on it.
This article was written by Giuseppe Dellamotta at investinglive.com.