© Reuters
Investing.com – is one of the biggest beneficiaries of the recent rally, rising more than 12%. The broke out of its upside range and even managed to break through the psychological $1500 mark.
This was made possible by US data which, from a market perspective, should trigger a change of course in the Fed’s monetary policy. The index fell for the second consecutive month. In seasonally adjusted data, the decline reached -1.3%, which is much more than the forecast of -0.5%. Such a large drop had not happened since the housing crisis of 2008.
House prices have a 30 percent weighting in the calculation of US inflation and the sharp drop will therefore have a significant impact on the. That is to say, the indicator that the tries to control with its rate hikes.
The market is assuming that the slowdown in the housing market is an early indicator that inflation is moderating and that the US central bank is moving away from its restrictive monetary policy stance.
Ether reacted particularly strongly to this development compared to other cryptocurrencies, as ETH became deflationary with the meltdown.
This means that with each transaction, more tokens are burned than distributed by verification of the operation. During the second week of October, Ethereum supply dropped by 4,000 tokens.
Ethereum Technical Benchmarks
As of Sunday, Ether hit a daily closing price above the 23.6% Fibo retracement of $1335. After a test of the support on Monday and a confirmation of the breakout, an impressive rally took place on Tuesday. This one sustainably exceeded the 38.2 percent Fibo retracement of $1421.
The 50 percent Fibo retracement of $1491 may even have been breached briefly, but a daily close above this level was not yet on the cards. At the same time, a 100-day AD test took place.
Today, trading again takes place above the 50% Fibo retracement and the focus is again on the 100-day MA of $1523.
Above this, the room for an extension of gains in the direction of the 61.8% Fibo retracement at $1560 would increase. Next, focus shifts to the 78.6% Fibo retracement of $1659 and the mid-high of $1786.
Besides the 100-day MA, however, there is another limiting factor that argues for a consolidation of gains. The RSI has reached the limit of overbought conditions with a value of 69.80.
By Marco Oehrl