FUNDAMENTAL OVERVIEW
Ethereum came under heavy selling pressure yesterday, falling around 5–6%. The move wasn’t triggered by a major Ethereum-specific negative development. Instead, the selloff was driven by a combination of deteriorating ETF flows amid a broader risk-off environment.
US spot Ethereum ETFs recorded another significant day of outflows, extending the withdrawal streak to seven sessions, while heavy long positioning amplified the downside through liquidations.
The macro backdrop has also become challenging for the crypto market. Rising oil prices amid renewed US-Iran escalation risks are pushing Treasury yields higher and keeping rate hike expectations steady, while a stronger dollar is adding further pressure on risk assets.
The question now is whether the selloff was primarily a leverage flush or the beginning of a more sustained correction. Continued ETF outflows alongside higher yields would keep the pressure on Ethereum, while stabilising flows and a more dovish Fed could help provide a floor.
The focus will remain on US-Iran developments and the Fed. A de-escalation should ease oil prices, Treasury yields and the US dollar, providing some support to Ethereum. A prolonged stalemate with direct military confrontation, on the other hand, will likely keep the cryptocurrency under pressure.
ETHEREUM TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that Ethereumbroke below the major upward trendline and extended the losses as the sellers piled in to target a drop into the 2,360 support next. If the price gets there, we can expect the buyers to step in, with a defined risk below the next major trendline, to position for a rally into the 3,400 level. The sellers, on the other hand, will look for a break below the trendline to increase the bearish bets into the 1,900 level next.
ETHEREUM TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see the broke both below the trendline and the 2,630 support yesterday, with the sellers piling in at every break. If we get a pullback into the 2,630 resistance, we can expect the sellers to step in, with a defined risk above it, to keep pushing into new lows. The buyers, on the other hand, will look for a break higher to start piling in for new highs, with the downward trendline as the first target.
ETHEREUM TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we might have an upward counter-trendline forming if the price makes a new higher high. The buyers will likely continue to lean on the trendline, with a defined risk below it, to keep pushing into the 2,630 resistance, while the sellers will look for a break lower to increase the bearish bets into new lows. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Todaywe have Fed’s Waller speaking and the latest US Jobless Claims figures. Tomorrow, we conclude the week with the University of Michigan Consumer Sentiment survey.
This article was written by Giuseppe Dellamotta at investinglive.com.