This Thursday, October 13, may act as a new justice of the peace in the financial markets. In fact, we will learn about inflation in the United States for the month of September. Consensus predicts it at 8.1% against 8.3% in August. A higher-than-expected figure could extend the Fed’s monetary policy tightening longer than expected. And then the possibility that the dollar would continue its rise against other currencies.
In this sense, this would not help the business of cryptocurrencies, which themselves remain fragile to the withdrawal of liquidity from the US Federal Reserve. In this connection Altcoin leader Ethereum has been hovering around its 2018 ATH since mid-September. Or more specifically, he lost his luster after the formalization of The Merge.
In addition, the latest technical analyzes in relation to it show total indecision in the short term. But the underlying trend remains deeply bearish since its last ATH in November 2021. And it is in a flawed market context that we will see whether the price situation for ETH can settle or not.
Ethereum in Weekly Units – Soon Four Weeks in a Row Around 2018 ATH?
Ethereum prices have stabilized around the 2018 ATH for nearly four consecutive weeks. Let’s say it with amazement, it’s dead calm. In any case, buyers would hang on to the good news, at least graphically. Fundamentally, we should not expect a lifting of the current uncertainty in the financial markets in the near future.
If we go back to the technical analysis in weekly units, it would be difficult at this point to see the end of ETH’s bear market tunnel. For proof whether you like it or not, Weinstein’s Phase 4 remains intense. With a 30 week moving average (MM30 weekly) which would move down towards the $1700 resistance. Also, prices are now below $1400, which has just changed polarity from support to resistance.
And when that wasn’t enough, a potential bearish MACD crossover from the signal could be the grain of sand to send Ethereum prices back towards the $1000 support, not far from the year’s low levels. In that case, we would be closing in on a resumption of its bear market since its last ATH in November 2021. This would eliminate the scenario of a price crossing beyond the descending line.
Daily Ethereum Units – Technical Signals Converging Downward
In daily units, that tidy or a narrow horizontal channel between $1250 support and $1400 resistance speaks to Ethereum’s difficulty in finding a clear short-term trend. And on closer inspection, the balance would be quite negative. Because it is clear that unfavorable technical signals are beginning to multiply.
On the one hand, the technical indicators have been below their respective water lines since the end of August, despite a stealth crossing that took place between September 7 and 13. Especially since we could see a negative adjustment of the MACD in both daily and weekly units. And on the other hand, the 200-day moving average (daily 200MM) is mimicking the weekly 30MM by moving toward the $1700 resistance.
Based on this hot observation, this could trigger a return of ETH prices towards $1000 in the event of a break from the bottom of tidy to $1250. But if potential shocks to the financial markets should arise unexpectedlywould we risk going back to three-digit prices. With support of $700 which would be in the view of the sellers.
ETH vs BTC – Domination at stake?
Between the 2021 bullrun and the current bearrun, Ethereum is holding its own against Bitcoin citing the evolution of the ETH/BTC ratio. Having said that, As tensions arise in the financial markets, Satoshi Nakomoto’s digital currency is indeed confirming its status as the undisputed leader in cryptocurrencies. And furthermore, BTC’s dominance had increased from 39 to 48% between January and early June.
In the event of a resumption of the bear market, we could once again wonder about Ethereum’s ability to better differentiate itself from Bitcoin. Not only would the final minutes of the FED argue that the current measures of monetary tightening would not be severe enough to fight inflation. But unfortunately, this would mean that the rate hike cycle would have a good chance of extending into 2023.
And it’s no coincidence that ETH suffered more than BTC during the last wave of correction last spring. Given the Fed’s determination to return inflation to an average of 2%, a favorable trend reversal in the other cryptocurrency market cap seems out of context.
In short, if we want to be more explicit, the coming weeks do not bode well. And to drive the point home, the acceleration of the reduction of the FED’s asset balance could not encourage a return in favor of the risky asset classes most vulnerable to liquidityand initially cryptocurrencies.
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