Ether (ETH), the cryptocurrency that underpins the Ethereum blockchain, is still up nearly 18% over the past two weeks, despite dropping more than 7% from its recent high near $1,680 last week. Ethereum is the most popular and well-known smart contract-enabled decentralized Layer 1 blockchain protocol, and its native Ether cryptocurrency is the second most valuable after the world’s first cryptocurrency, Bitcoin, by market capitalization. is a cryptocurrency with
ETH sellers have dominated the past few days since Ether failed to break out of the key resistance in the $1,680 area last week. Technical selling by intraday traders is also likely to play a role. ETH’s latest drop was triggered by a bearish breakout from the short-term pennant structure the cryptocurrency has formed on his 4-hour candlestick.
What’s next for ETH?
Things look more positive when looking at ETH in the long term. Yes, ETH has failed to break out of the $1,680 resistance (so far), but the cryptocurrency remains within the long-term downtrend channel that dominated late 2022 and early 2023 no longer.
Ether also continues to trade heavily north of all major moving averages, all of which are currently moving higher. On the other hand, the rising rate of the 50DMA suggests a bullish golden cross in February, assuming that ETH doesn’t fall significantly in the coming weeks or months ).
ETH’s latest drop means Ether is no longer overbought, according to the 14-day Relative Strength Index (RSI), with room for buying pressure to rebuild in the coming days and weeks suggests that
Positive fundamental tailwind
Macro and Ethereum-specific fundamentals may continue to moderate the downside. On the macro side, the end of the Fed’s rate hike cycle is nearing, and market expectations are rising that the Fed will ease interest rates again by the end of this year and by 2024. This is because inflationary pressures in the US are easing rapidly and there are increasing signs that the economy is headed for recession.
The Fed’s optimistic outlook has historically boosted cryptocurrencies, as happened in 2019 and 2020/2021. Ethereum, meanwhile, is set to implement a major upgrade that will enable the withdrawal of staked ETH at the end of this quarter, which is expected to drive new demand for the asset, prompting investors to stabilize. are attracted by the prospect of flexible access to .
Ethereum network fundamentals remain solid, with the number of non-zero balance addresses expected to cross the critical 100 million threshold later this year. A combination of the above factors could sustain ETH support in the coming weeks and months, with the crypto finally retesting its 2022 summer highs north of his $2,000. can.
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