Hard return to earth for the prince of cryptos after The Merge! – As we suspected last week, the switch from Ethereum (ETH) to PoS did not really have a positive impact on prices. On the contrary, the sellers regained control by sending them back towards the $1400 support. At the time of writing, the latest technical analysis tells us that ETH prices are tentative around this intermediate level between the $1700 resistance and the $1000 support. Which is quite understandable as the next FED meeting approaches. Even if a rate hike is unanimous, it will be necessary to follow the behavior of the prince of cryptos at the time of Jerome Powell’s speech. And from then on, we would eventually know more if the bear run since its last ATH in November 2021 would resume service to the chagrin of cryptocurrency investors.
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Ethereum in weekly units – A chart situation that is struggling to move in the positive direction
Without wanting to predict what could happen during a week that promises to be volatile, it is clear that Last week’s bearish candle highlighted a second failure below the $1700 resistance. Especially since this unfavorable technical signal would compromise the scenario of an extension of the technical rebound since mid-June.
Given the magnitude of last week’s decline, Ethereum prices are intensely threatening the $1400 support, which itself could become resistance in the event of a definitive break. At the same time, they are again below the Tenkan, then see the crossing of the descending line of the bear run moving away again.
Even worse, the status quo of ETH and Chikou Span prices under the Kumo (Ichimoku cloud) since last May, may not facilitate an immediate trend reversal in weekly units. Anyway, support – or not – from the support of $1400, would not change anything in the current state, at least until the end of the year.
Ethereum in daily units – The threat below $1400 is becoming clearer
In daily units, things seem to be clearer. whether we like it or not, Ethereum prices have momentarily confirmed the break of the $1400 support. However, we would have to wait for the weekly close to validate this technical signal.
In this sense, it would coincide with prices and a Chikou Span that would end up below the Kumo. On the condition that they come back halfway to its lows of the year, that is to say the support of $1000. On the other hand, ETH prices would see its spread against the Tenkan widen on the downside. This could augur an oversell with the possibility of seeing a pullback below $1400. And next, continuing the bearish momentum since mid-August, we would be back to where they were in mid-June.
Not only, the prince of cryptos is losing its dominance over Bitcoin because it no longer benefits from The Merge effect. But a downward catch-up linked to the harsh reality of the financial markets since the beginning of the year, would make us fear trying sessions both emotionally and in terms of volatility.
Pending the outcome of the next FED meeting which is expected to result in a 75 basis point rate hike, the prince of crypto’s technical rebound since mid-June suddenly cooled as prices once again stumbled below the resistance of $1700. And insofar as we do not observe an easing of the current uncertainties on the financial markets, the momentum would lean primarily downwards.
Without the help of a healthy decline in the dollar and a lull in bond rates, Ethereum’s bear run since its last ATH in 2021 would enter a worrying psychological stage of capitulation. Hence the importance of preserving at all costs the $1400 or the $1000 as a last resort. Otherwise, a third wave of correction would wipe out much of the last bull run.
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