Ethereum sold off sharply on Thursday as the stock market rout triggered a
wave of risk aversion across financial markets. The shift in sentiment weighed
on the crypto market too, as traders reassessed the negative implications of
the blue sweep for the macroeconomic outlook.
The Democratic Congress should bring greater fiscal restraint and tighter regulation,
including additional restrictions on AI infrastructure investment. Given how
leveraged the US economy is to AI investment, a reversal would have significant
consequences for the broader economy.
Moreover, a Democratic Congress does not limit Trump’s ability to impose
tariffs or continue military operations against Iran. So, all in all, the future
US growth outlook turned even more negative, unless the conflict with Iran
finally comes to an end.
There haven’t been
new developments on the US-Iran front. Trump told CNN that the US is unlikely
to resume military action against Iran if negotiations make sufficient progress
on Tehran’s nuclear programme and the reopening of the Strait of Hormuz.
However, he stressed that any decision to avoid further strikes would depend on
Iran agreeing to a strong enough deal, adding that the US remains ready to take
military action if necessary.
US Secretary of
State Rubio said negotiations with Iran have made little progress, describing
Tehran’s demands as unacceptable, but stressed that Washington remains open to
pursuing a diplomatic resolution.
Tomorrow we also
get the US CPI report. The data could seal a rate hike for the December FOMC
meeting, with traders already pricing in a 79% probability. If we get a hot
report, we could see Ethereum coming under renewed pressure on a hawkish
repricing. Soft data, on the other hand, could lead to a short-term relief
rally, but it wouldn’t change the fundamental trend.
ETHEREUM TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Ethereum broke above the downward
trendline but eventually tanked to new lows. The sellers will continue to
target the 1,900 level. If the price gets there, we can expect the buyers to
step in, with a defined risk below the level, to position for a rally into the
3,400 resistance. The sellers, on the other hand, will look for a break lower
to increase the bearish bets into the 1,500 level next.
ETHEREUM TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have
a downward trendline defining the bearish momentum. If we get a pullback, we
can expect the sellers to lean on the trendline, with a defined risk above it,
to keep targeting the 1,900 level. The buyers, on the other hand, will want to
see the price breaking higher to pile in for a rally into new highs.
ETHEREUM TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as the sellers will have a better risk to reward setup
around the trendline, while the buyers will need a breakout to open the door
for new highs. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we have
the US CPI report. On Thursday, we get the latest US Jobless Claims figures. On
Friday, we conclude the week with the US PPI data.
This article was written by Giuseppe Dellamotta at investinglive.com.
