Ethereum broke
below key technical levels recently as fears of potential US strikes on Iran
weighed on the crypto market. The expectations
proved to be wrong, and we’ve started to see a general rebound in risk sentiment
as oil prices eased.
In the bigger picture, nothing has changed as the
Middle East crisis continues to put upward pressure on inflation while being a
drag on global growth. The Federal Reserve is forced to keep a tightening bias,
and we have the midterm elections adding further uncertainty. These negative forces
are likely to limit major rallies in Ethereum.
This week, the focus will be on the FOMC decision on
Wednesday and the developments in the Middle East.
The Fed is widely
expected to keep interest rates unchanged, so a surprise rate hike would
trigger a strong selloff in Ethereum. We won’t get the Dot Plot at this
meeting, so the attention will be on Fed Chair Warsh. Given his reluctance to
provide forward guidance, though, he’s unlikely to say much, although traders
will keep an eye for any hawkish surprise.
ETHEREUM TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Ethereum broke below the major upward trendline
and the 2,360 support, opening the door for a move into the 1,900 level. The
sellers will likely continue to pile in around these levels, with a defined
risk above the downward trendline, to keep targeting the 1,900 level. The buyers,
on the other hand, will need a break above the downward trendline to start positioning
for a rally into the 3,400 level next, with the 2,800 level as the first
target.
ETHEREUM TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can
see the price is consolidating below the broken support. If we get another
retest, we can expect the sellers to step in, with a defined risk above the broken
support, to keep targeting new lows. The buyers, on the other hand, will look
for a break higher to extend the pullback into the downward trendline.
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 broken support, while the buyers will need a break to start positioning
for new highs. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we
get the US Consumer Confidence report. On Wednesday, we have the FOMC rate
decision. On Thursday, we get the US GDP report, the US PCE and the latest US
Jobless Claims figures. On Friday, we conclude the week with the US Employment
Cost Index.
This article was written by Giuseppe Dellamotta at investinglive.com.
