Ethereum faced downward
pressure due to the recent shift towards a more hawkish stance in the markets,
with expectations of additional rate hikes by the Federal Reserve. This impact
is attributed to Ethereum’s classification as a risk asset, as its correlation
with traditional markets and fundamentals has increased with wider adoption.
However, these hawkish expectations have started to diminish due to
disappointing economic data. Nevertheless, this week, Ethereum was further
affected by regulatory concerns raised by the U.S. Securities and Exchange
Commission (SEC).
Specifically, the SEC filed
a lawsuit against Binance, the world’s largest cryptocurrency exchange,
and its Chairman Zhao on Monday. The allegations include mishandling customer
funds, providing false information to regulators, and misleading investors
about operational safeguards. The following day, the SEC also sued Coinbase for operating as an unregistered broker.
Despite these regulatory challenges, Ethereum experienced a significant rally,
possibly driven by expectations that increased regulation would strengthen the
overall cryptocurrency market or simply due to a technical rebound.
Ethereum Technical Analysis
– Daily Timeframe
Ethereum Daily
On the daily chart, Ethereum bounced on the 50% Fibonacci retracement level
and started to range between the 1900 level and the Fibonacci support. The
market got stuck in a range as the fundamentals remain increasingly bearish
with hawkish or recessionary expectations and attacks on the regulatory front.
The divergence with the
MACD
signalled a possible pullback or reversal coming when the price broke out of
the 2029 high and eventually that’s what we got.
Ethereum Technical Analysis
– 4 hour Timeframe
Ethereum 4 hour
On the 4 hour chart, we can better see the current
rangebound price action and the yesterday’s rally soon after the SEC sued
Coinbase. There’s not much to glean from this chart as support and resistance
levels are messy and the markets are in a limbo until the next week’s CPI and
FOMC events.
Ethereum Technical Analysis
– 1 hour Timeframe
Ethereum 1 hour
On the 1 hour chart, we have some support zone
at the 1840 level where we can find the confluence with the 38.2% and 50%
Fibonacci retracement levels. We may find buyers leaning on this area with a
defined stop below it and target the 1920 high. The sellers, on the other hand,
are likely to pile in if the price breaks below the 1840 support zone and
target the 1681 level.