Ethereum continues
to consolidate around a key support turned resistance maintaining a bearish
bias as the uncertainty around the future outlook is now at its highest levels.
On one hand, we have some resilience in the economies with the inflation rates
slowly normalising, but on the other hand, we have signs of weakening growth
and the central banks committed to keep monetary conditions tight for a long
time. The technicals should help with the risk management until we start to get
a clearer direction on the fundamentals side.
Ethereum Technical Analysis
– Daily Timeframe
Ethereum Daily
On the daily chart, we can see that Ethereum
recently bounced on the previous low and rallied into the downward trendline where it
found resistance. This is where we should see the sellers piling in with a
defined risk above the trendline to target a new low. The buyers, on the other
hand, will want to see the price breaking above the trendline to position for
more upside and start targeting the highs.
Ethereum Technical Analysis
– 4 hour Timeframe
Ethereum 4 hour
On the 4 hour chart, we can see that the price has
been diverging with the
MACD as it
approached the trendline and the resistance at 1681.
This is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we should see a pullback into the black trendline
where the buyers are likely to step in with a defined risk below the trendline
to target new higher highs. The sellers, on the other hand, will want to see
the price breaking below the trendline to pile in and target the low first and
eventually a break lower.
Ethereum Technical Analysis
– 1 hour Timeframe
Ethereum 1 hour
On the 1 hour chart, we can see that at
the moment the price action is a bit messy as we are hovering around key
resistances. The best strategy would be to wait for a clear breakout as
rangebound markets can chop traders out.
Upcoming Events
This week has a few important economic releases that can
have an impact on Ethereum. Today, the Fed is expected to keep rates unchanged
with the market focusing more on the Dot Plot and Powell’s press conference,
where he’s likely to reaffirm their data dependency. Tomorrow, we will get the
latest US Jobless Claims report and much worse than expected data should weigh
on Ethereum due to recessionary fears while much better-than-expected figures
are likely to weigh on the cryptocurrency due to risks of more tightening from
the Fed. Finally on Friday we conclude the week with the US PMIs data with the
same playbook as for the Jobless Claims, that is, weak data is likely to send
the markets into risk off and lead to weakness in Ethereum, while strong data
should weigh due to a more hawkish repricing in rates.