The prince of cryptos still struggling under $1700 – For the past few weeks, we have had a feeling of déjà vu on the price of Ethereum (ETH). Indeed, the bulls are still powerless at the approach of a major resistance.
Moreover, the uncertainties surrounding inflation in the United States resurfaced last week. The high point was the FED’s favorite statistic, the PCE, which rose unexpectedly in January after several months of decline. This constituted a serious brake on all risky asset classes.
In a market context where doubts of a quick return of inflation to the tune of 2% are gradually becoming unlikely, let’s review the latest technical analyzes of the prince of cryptos on a logarithmic scale. With the objective of knowing if the rebound of this beginning of the year could be out of breath or not.
ETH/BTC – A favorable balance of power against the king of cryptos
Despite the bear run of 2022 on cryptos, we have to admit that Ethereum maintains its balance of power against Bitcoin. Many projects backed by its blockchain could partly explain this structural trend.
The other explanation would be graphical. Precisely, the prince of cryptos has not made new lows since June 2022, unlike Bitcoin. At the peak of the FTX affair, the king of crytos broke down $20,000 to find a drop point towards $16,000.
Nevertheless, a marked consolidation of ETH/BTC in the coming weekswould mean that the cryptocurrency cycle would still remain in bad shape whether we like it or not. Therefore, we could see a resurgence in Bitcoin dominance.
Conversely, a return of ETH/BTC towards 0.08 and beyond would give a real boost to the rebound at the start of the year on the prince of cryptos.
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Ethereum in Weekly Units – Price Stumbles Below $1700 and the Falling Line
The month of February could end positively on the condition of a close beyond $1585. Nevertheless, the price of Ethereum has all the trouble in the world to cross the resistance of $ 1700. As proof, the prince of cryptos has been hovering around this major level for four to five weeks. And whatever one may say, this resistance has seriously annoyed the bulls since last mid-August. But unlike previous failures, the descending line is also an obstacle against the beginning of neutralization of the bear run.
Despite prices above the Tenkan and the Kijun in weekly units, we still see them remaining well below the Kumo (Ichimoku Cloud). At the same time, the Chikou Span is just as bad without really hoping for a favorable situation in the coming months. On the other hand and due to the difficulty in taming the $1700, the Tenkan and the Kijun are stagnating with the concern of a possible consolidation.
Assuming that the week is of the same caliber as the previous one, the price of ETH could fall back below $1700 and the descending line. With bears potentially sending it towards $1400. In the event of a bearish extension, we would lose the benefit of the rebound built at the beginning of the year with the threat of even coming back towards $1200.
In contrast and given the state of the place in the financial markets, it would take catalysts from nowhere for the prince of cryptos to cross $1700. In this sense, prices would also cross above the descending line. Then the bulls would be keen to carry them inside the Kumo with a view to temporarily neutralizing the bear run of ETH since its last ATH in November 2021.
Ethereum in daily units – Back inside the Kumo?
On the verge of attacking $1700 and the descending line, Ethereum is falling once again in daily units. During the month of February, prices moved both above and below the Tenkan and the Kijun. This unfortunately shows that the bulls tense up in the most critical moments.
A break under the Kijun would eventually lead the prince of cryptos inside the Kumo and why not the $1400, not far from the lower limit of the cloud, the Senkou Span B (SSB). And suppose consolidation were to increase, the unfavorable polarity change from support to resistance around $1400 would push prices down and the Chikou Span under the Kumo and heading towards $1200. In weekly units, this corroborated to relaunch the bears by putting back on the table the scenario of a new wave of correction below the support of $1000.
To avoid this fatal reversal of the situation, it would be absolutely necessary to safeguard the price of ETH and the Chikou Span at a reasonable distance from the Kumo. For this reason, Breaking out of $1700 would balance the match between bulls and bears with the possibility of looking at $2000.
In summary, as long as $1700 proves to be an insurmountable psychological barrier, Ethereum’s bear run since its last ATH in November 2021 could unfortunately come back to light. And on this point, it would be useless to mention the first signs of a favorable trend reversal. Especially since there is work to do to review a Chikou Span beyond the Kumo in weekly units. We would fear that it would take a long time for the prince of cryptos to return to a zone of risk appetite.
To make matters worse, the bad news on inflation in the United States could lead the Fed to extend its monetary firming longer than expected. With the concern that it would intend to preserve its credibility vis-à-vis the financial markets.
Therefore, expectations for a pivot in the near future could be shattered. Because precisely, a monetary environment could probably take shape. Thus, the non-return of liquidity from the FED would not support cryptocurrencies in the broad sense. With the fear that the prince of cryptos will get bogged down under prices below $1,000, if the financial markets were to really rock.
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