A tormented start to the year 2023 for the prince of cryptos? – 2022 will not go down in the annals of Ethereum (ETH) history. Indeed, its second bear run in history, which is still ongoing, has caused its market capitalization to collapse by three quarters since its last ATH in November 2021. To the point that it has left its mark on many cryptocurrency investors. Now, 2023 begins in a complex market context with many major uncertainties such as inflation, the prospect of a recession, the geopolitical conflict between Russia and Ukraine, etc.
In this sense, the price of Ethereum has struggled to engage in a clear trend in recent weeks. And although it digests the bankruptcy of FTX rather well compared to other altcoins, we are not immune a threat of a new wave of correction in its bear market. Especially since the FED has indicated that its monetary tightening will continue. And to that, it will have to be contextualized with a restrictive tax policy in the United States accompanied by a minimum tax of 15% for large companies and an excise tax of 1% on share buybacks.
Despite these headwinds, will the prince of cryptos succeed in distinguishing himself positively? Or stay in the trend of an extremely lackluster 2022? This is what we will see on the latest technical analysis.
Ethereum in monthly units – A complicated end of the year
The last quarter of 2022, which had started well, ended in a bad way. Because precisely, the price of Ethereum is struggling to move away from $1200. This explains the sudden drop in the Tenkan. At the same time, he is getting dangerously close to a position under the Ichimoku cloud aka the Kumo. As for the Chikou Span which will probably remain above the Kumo in the coming months, it could end up below the price of the prince of cryptos.
On closer inspection, whether or not $1200 will hold would not be the decisive chart turning point so long awaited by investors. Frankly, it is rather symbolic because of its proximity to the 2018 ATH. Thus, investors should pay attention to the $1000 support. And if the bears manage to take over for good in the coming months, not only the prince of cryptos would revert to a three unit quotation. But the possibility of a third wave of correction would lead to a fatal defeat for the bulls.
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Ethereum in weekly units – Worrying stalemate in price and Chikou Span under the Kumo
I’ve been thinking about you for months an Ethereum price and a Chikou Span below the Kumo in weekly units. The support of $1200, despite the bankruptcy of FTX, does not erase these signals which unfortunately make the strength of the current bear run. And besides, the prince of cryptos has not crossed the Kijun since its passage under the cloud in May 2022 with various successive failures under the resistance of $1700.
This is why the rebounds which we have previously witnessed were only a breath of fresh air for the suffering bulls. And at the time of writing, I fear that the sideways crossing of the descending line does not send a reassuring message about the future trend. Especially since the evolution of the future Kumo would appear as a ball and chain making it difficult to build the foundations for a lasting rebound.
In the event that the bulls concede the $1200, the threat under $1000 could quickly become clearer if the market context were to be chaotic. Worse still, it would cause ETH and the Chikou Span to become bogged down below the Kumo for quite some time. On the contrary, we would start on yet another technical rebound towards $1400 or $1700 in the absence of catalysts that would worry the bears.
Ethereum in daily units – Prices very close to Kumo but without real conviction to buy
In daily units, Ethereum plays on investors’ nerves around $1,200 and as it approaches the Kumo’s lower limit, the Senkou Span A (SSA). Starting from this constat, the short-term trend is neutral without disrupting the bear run. With a Chikou Span that pales respectively under the courses, the Kumo and the downline.
In the event of a rebound, the resistance of $1400, close to the upper limit of the Kumo, the Senkou Span B (SSB), would not be an easy target to tame. However, if successful, we would pave the way back towards $1700 in the hope that the prince of cryptos will close its spread against the Kumo in weekly units. And maybe we would then have a first breach to exploit to accumulate purchases cheaply.
Conversely, breaking $1200 would result in retesting last year’s lows. In which case, all the signals could turn red if the start of the year 2023 were to turn sour.
In summary, there is nothing to feed about any buying interest in the graphical prince of cryptos just yet. Not only that, resistors are always raining. But the developments of the Ichimoku Kinko Hyo in both weekly and daily units would not justify any neutralization or reversal of the current trend.
In the perspective of an extension of the bear run, it would be appropriate to scrutinize the extent of the new wave of correction. With the fear that cryptocurrencies will be talked about again in the bad sense of the term. Below $1000, we would potentially enter the red alert zone on Ethereum. And why not converge on the 2018 bear run standards.
Finally, fundamentally, cryptocurrencies remain confused by the lack of liquidity of central banks linked in particular to the monetary tightening of the FED. Without restarting this engine, it must be admitted that a return of the Altseason would prove illusory as long as inflation in the United States does not contract significantly.
But suppose that central bank liquidity is no longer on the agenda during the 2020s. Then we may have to go through a tough consolidation of the cryptocurrency industry before we see a new bull run emerge. To do this, investors, whether bull or bear, should follow the course of the Fed’s monetary policy. And the least we can say at the moment is that the surge in bond rates could indicate a new monetary paradigm with several equations for all risky asset classes.
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