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ETH Under Pressure
The drop lower in Bitcoin over the last week has weighed on ETH. Bearish sentiment looks to be pervading through crypto markets this week on the back of BTC breaking below key support. However, yesterday’s FOMC suggests that all is not lost. While the recent shift in Fed outlook has weighed on risk markets, including crypto assets such as BTC and ETH, the Fed signalled yesterday that it still intends to push ahead with easing this year.
Shifting Fed View
Market pricing has shifted in recent months from forecasting a June rate cut to now expecting a September rate cut. The accompanying move higher in USD has been frustrating for crypto bulls, keeping digital assets anchored lower. However, the Fes struck a noticeably less-hawkish-than-expected tone at the FOCM yesterday, clearly suggesting that its preference lies in favour of easing as soon as inflation starts to come down again.
US Data is Key
With that in mind, there are bullish risks for ETH moving forward. If we start to see a softening in US data and inflation starting to drop again, this should bolster near-term easing expectations, pulling USD lower and allowing crypto assets room to recover. The first stop will be tomorrow’s US jobs data with any undershooting of forecasts to be firmly bearish for USD and firmly bullish for crypto.
Technical Views
ETH
The move lower in ETH still looks corrective for now with price tracking the contracting triangle pattern lower. The market is now testing support at the triangle lows and a retest of the broken bull channel highs, with 2633 sitting below as structural support. While this area holds, the focus is on an eventual recovery and return to upside targeting 3582.5 first.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.