Ethereum whipsawed yesterday as the Democrats’ victory of both the House and the
Senate initially weighed on the cryptocurrency before staging a strong rebound.
It looks like the market believes the midterm loss will force Trump to
seek an exit from the Iran war, eventually supporting economic growth as energy
prices fall significantly.
That’s also what we’ve seen in the oil market yesterday as prices dropped
quickly after US Vice President Vance blamed the war with Iran for the Republican Party’s heavy losses in the
midterm elections. His post published on X reinforced market expectations that
the Trump administration could seek an off-ramp from the war rather than
escalate military operations.
Keep in mind, though, that Trump can legally continue military
operations against Iran even if Democrats control both the House and the
Senate. So, it’s not that simple to force Trump out of the war now that he has
nothing to lose. But for now, this seems the scenario the market is betting on.
Looking ahead, the focus will remain on US-Iran negotiations. A
breakthrough would be positive for Ethereum on improving growth outlook and
positive risk sentiment. An escalation, on the other hand, will likely trigger
another selloff on increasing growth concerns and safe haven flows.
ETHEREUM TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Ethereum broke above the downward trendline
and opened the door for new highs. The breakout could extend the rally into the
2,575 level. If the price gets there, we can expect the sellers to step in,
with a defined risk above the level, to position for a drop into the 1,900
level. The buyers, on the other hand, will want to see the price breaking higher
to increase the bullish bets into the 3,400 resistance, with the 2,800 level as
the first target.
ETHEREUM TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we an
upward trendline that could act as support in case the price pulls back. If the
price gets there, we can expect the buyers to lean on the trendline, with a
defined risk below it, to keep targeting new highs. The sellers, on the other
hand, will look for a break to increase the bearish bets into the 1,900 level
next.
ETHEREUM TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, the consolidation
formed a potential bullish pennant. The buyers will want to see the price breaking
higher to increase the bullish bets into the 2,575 level, while the sellers
will look for a break lower to position for a pullback into the broken
trendline. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we
get the latest US Jobless Claims figures. Tomorrow, we conclude the week with
the US NFP report and the University of Michigan Consumer sentiment survey.
This article was written by Giuseppe Dellamotta at investinglive.com.
