This Thursday, October 13 could act as a new justice of the peace on the financial markets. Indeed, we will learn about inflation in the United States for the month of September. The consensus forecasts it at 8.1% against 8.3% in August. A higher-than-expected figure could prolong the Fed’s monetary tightening longer than expected. And so, the possibility that the dollar would continue its ascent against other currencies.
In this sense, this would not help the business of cryptocurrencies, which themselves remain fragile by the withdrawal of liquidity from the American central bank. In this regard, Altcoin leader Ethereum has been hovering around its 2018 ATH since mid-September. Or more concretely, he lost his luster after the formalization of The Merge.
Moreover, the latest technical analyzes against it show total indecisiveness in the short term. But the underlying trend remains deeply bearish since its last ATH in November 2021. And it is in a lackluster market context that we will see if the price situation of ETH could settle or not.
Ethereum in weekly units – Soon four weeks in a row around the 2018 ATH?
Ethereum prices have stabilized around the 2018 ATH for almost four consecutive weeks. Let’s say it with astonishment, it’s dead calm. In any case, buyers would hang on to the bit of good news, at least graphically. Because fundamentally, we should not expect a lifting of the current uncertainties on the financial markets in the immediate future.
If we go back to the technical analysis in weekly units, it would be difficult at this time to see the end of the ETH bear market tunnel. For proof whether you like it or not, Weinstein’s phase 4 remains intense. With a moving average at 30 weeks (MM30 weekly) which would be moving downwards towards the resistance of $1700. Moreover, prices are now below $1400 which has just changed polarity from support to resistance.
And as that was not 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 its lows for the year. In which case, we would be closing in on a resumption of its bear market since its last ATH in November 2021. This would move away the scenario of a price crossing beyond the descending line.
Ethereum Daily Units – Technical Signals Converging Downward
In daily units, the tidy or 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 rather negative. Because precisely, it is clear that unfavorable technical signals are beginning to multiply.
On the one hand, the technical indicators have resided below their respective waterlines since the end of August, despite a stealth crossing that took place between September 7 and 13. Especially since we could see a negative alignment of the MACD in both daily and weekly units. And on the other hand, the 200-day moving average (daily 200MM) mimics the weekly 30MM by heading towards the resistance of $1700.
Based on this hot observation, this could precipitate a return of ETH prices towards $1000 in the event of a break from the bottom of the tidy at $1250. But if potential shocks to financial markets were to occur unexpectedlywe would risk going back to three-digit prices. With the support of $700 which would be in the sights of sellers.
ETH vs BTC – Domination in question?
Between the 2021 bullrun and the current bearrun, Ethereum holds its own against Bitcoin in reference to the evolution of the ETH/BTC ratio. That being said, when financial market tensions occur, Satoshi Nakomoto’s digital currency does indeed confirm its status as the undisputed leader in cryptocurrencies. And besides, the dominance of BTC had increased from 39 to 48% between January and the beginning of June.
In the event of a resumption of the bear market, we could again wonder about the ability of Ethereum to better differentiate itself from Bitcoin. Not only, the last minutes of the FED would assert that the current measures of monetary tightening would not be so strict to fight against inflation. But unfortunately, this would mean that the rate hike cycle would have a good chance of extending into 2023.
And it is not for rieb that ETH suffered more than BTC during the last wave of correction last spring. Given the Fed’s determination to bring inflation back to an average of 2%, a favorable trend reversal in the second cryptocurrency market cap would seem to be out of context.
In short, if we want to be more explicit, the weeks to come do not bode well. And to drive the point home, the acceleration of the reduction of the FED’s asset balance sheet could not encourage a return to favor of the risky asset classes most vulnerable to liquidityand in the first place, cryptocurrencies.
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