The prince of cryptos on borrowed time! But for how long ? – After seeing prices double since mid-June, Ethereum (ETH) valid unfortunately his stoppage under major resistance. Now he finds himself in contact with a critical medium. And for good reason, the remarks of FED Chairman Jerome Powell at the Jackson Hole symposium (the Mecca of central banks) irrevocably buried hopes of a historic slowdown and monetary tightening. A situation that could soon lead to a hard return to reality on the cryptocurrency market
Especially since the ETH price would move towards this central scenario. Indeed, the gains from the technical rebound in ETH prices are halving. But despite a good start to the week, the latest technical analyzes seem to show bears (or sellers) gradually emerging from their summer hibernation. To the point of wondering if (it would only be an aperitif to prepare for the resumption of the bear run of the prince of cryptos since his last ATH in November 2021.
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Ethereum in weekly units – $1400 support hangs by a thread
For the first time since mid-June, Ethereum is falling for the second week in a row. Fortunately, the support at $1400 holds firm to preserve the possibility of an extension of its technical rebound. In this sense, we see prices trying to get back above the Tenkan in weekly units.
To get straight to the point, it would absolutely be necessary for this week’s candle to positively and completely encompass the previous one. This would provide a new attempt to break up the resistance of $1700 from a throwback above $1400 and a crossing of the Tenkan. But since the FED handed over the church to the middle of the village last Friday, things look tense.
Firstly, the simultaneous price position of the Prince of Cryptos and the Chikou Span below the Kumo (Ichimoku cloud) still remain on a status quo that has taken root since mid-May. And on the other hand, the significant thickness of the cloud projected for the first quarter of 2023 would constitute a major handicap in the perspective of considering the end of the current bear run, despite a possible crossing of the descending line.
These unfavorable restoring forces combined with renewed tension from the current uncertainties in the financial markets, would endanger the support of $1400. But they might even resuscitate the threat below the $1000 support at the worst of times for risky asset classes.
Ethereum in daily units – A fatal pullback?
In line with the second consecutive downward weekly candle, Ethereum has confirmed a pullback below the resistance of $1700 in daily units, but not only. In effect, it also collides under the Tenkan and the Kijun whose trajectory takes a wrong turn. Based on this negative technical signal which is worth three in one, the technical rebound since mid-June could be partially neutralized if ETH prices were to reintegrate into Kumo.
For now, the prince of cryptos is trying to tame the Tenkan again. But if successful, the Kijun, not far from $1700, could seriously act as a double resistance. To the point of forming a fatal pullback that would lead us towards breaking the $1400 support and prices below the Kumo. At the same time, the Chikou Span would return inside the cloud, breaking the Kijun as it passed.
To avoid this market scenario, the last hopes rest on a throwback on the triple bottom neckline around $1200. But in the event of failure, the bears would have their sights set on the support of $1000, which resisted so much before the summer. With Ethereum prices and a Chikou Span that would definitely be below Kumo.
In summary, if Ethereum prices are unable to regain momentum immediately, the bears are ready to make an impression. Especially since their first actions come at a time when we believed that a major resistance had been crossed, which turned out to be a false buy signal under the nose of many investors.
While this is my own concern, my fear is that this would signal the starting point for the Prince of Cryptos’ bear run recovery since his last ATH in November 2021. Not only are we getting closer to a September historically gloomy for all risky asset classes. But even worse, the age of central bank interventions in fire-fighting mode in the event of serious tensions in the financial markets now seems to be over. Therefore, further bouts of volatility are likely to be expected at any time. With an additional context particularly sensitive to a systemic event.
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