FUNDAMENTAL OVERVIEW
We haven’t got major idiosyncratic catalysts for Ethereum
this week, but we did have it on the macro side. The positive risk sentiment
stemming from the sharp decline in oil prices prior to the UN General Assembly
had been supporting the crypto market on easing inflation and rate hike
concerns.
Unfortunately, Trump poured
some cold water on expectations of an earlier end to the Iran war after he
repeated that the US would make a deal with Tehran after the November
elections. Oil prices, Treasury yields and the US dollar started to rise again
after his remarks and weighed risk assets like cryptocurrencies.
The optimism
returned yesterday, though, following the news that Iran has put an offer on the table, promising to reopen the Strait of
Hormuz within seven days if the US meets its terms. Iran’s Foreign Minister
Araghchi is staying in New York over the weekend to await a US response.
A breakthrough would be positive for Ethereum as
the aggressive rate hike bets will likely get pared back on easing inflation
concerns. A prolonged stalemate or even a re-escalation, on the other hand,
will likely continue to put pressure on the crypto market on tightening financial
conditions.
ETHEREUM TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Ethereumhas been pulling back in the
past few days as macro conditions turned negative. We have a major upward
trendline around the 2,560 support that makes that technical zone very strong.
If we get a pullback into the support, we can expect the buyers to step in with
a defined risk below the trendline to position for a rally into the 3,000
level. The sellers, on the other hand, will want to see the price breaking
below the trendline to pile in for a drop into the 2,360 level next.
ETHEREUM TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can
see that the bearish momentum increased as the sellers piled in on the break below
the upward trendline that was defining the bullish momentum. From a risk
management perspective, the buyers will have a better risk to reward setup
around the support and the major trendline to keep targeting new highs, while
the sellers will look for a break below it to extend the correction into the
2,360 level next.
ETHEREUM TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have a minor resistance zone around the 2,710 level. The sellers will likely
step in there with a defined risk above the resistance to keep pushing into the
2,560 support. The buyers, on the other hand, will want to see the price
breaking higher to pile in for a rally into new highs.
UPCOMING CATALYSTS
Today we don’t have anything
on the agenda, but traders will keep a close eye on US-Iran developments after
yesterday’s proposal of reopening the Strait of Hormuz under certain
conditions.
This article was written by Giuseppe Dellamotta at investinglive.com.