Ethereum sold off on Thursday following the news of the Binance security
breach. The sharp increase in liquidations across the market amplified the
downside.
Nevertheless, Ethereum eventually rebounded as Binance pledged to cover
customer losses and concerns about broader contagion gradually eased. Improving
sentiment around US-Iran negotiations and the prospect of lower oil prices also
helped support risk appetite.
Looking ahead, the macro backdrop remains challenging with inflation risks,
growth concerns, expectations of further Fed tightening and geopolitical
uncertainty limiting the potential for a sustained recovery.
We will likely need a breakthrough in US-Iran negotiations or more dovish
Fed signals to change the current bearish trend. A surprising Republican sweep
in the US midterm elections could also provide additional support on expected
fiscal expansion. A Democratic sweep, on the other hand, could put additional
pressure on Ethereum if there’s no breakthrough in US-Iran negotiations, or worse,
if Trump decides to escalate the war.
ETHEREUM TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Ethereumhas been on a sustained
downtrend for a month as macro headwinds kept weighing on the cryptocurrency.
We have a downward trendline defining the bearish momentum. We can expect the
sellers to lean on the trendline, with a defined risk above it, to keep
targeting the 1,900 level. 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, with
the 2,575 level as the first target.
ETHEREUM TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we
have another trendline that’s been acting as resistance. The sellers might want
to split their positions between the minor and the major trendline in case the price
breaks the minor trendline. The buyers, on the other hand, will look for breakouts
to position for new highs, with the 2,575 level as the first major target.
ETHEREUM TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as the sellers will have a better risk to reward setup
around the trendlines, while the buyers will need breakouts to open the door
for new highs. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Todaywe
have the US Job Openings data and the US midterm elections, although we will
get the first results early tomorrow. Tomorrow, we have the US ADP and the US
ISM Services PMI. On Thursday, we get the latest US Jobless Claims figures. On
Friday, we conclude the week with the US NFP report and the University of
Michigan Consumer sentiment survey.
This article was written by Giuseppe Dellamotta at investinglive.com.