The last week of October was the occasion for a very sharp rebound in the price of Ethereum, the second largest cryptocurrency on the market, having jumped 32.7% between the low of October 21 at $ 1252 and the peak of last Saturday at $ 1662. And although ETH corrected on Sunday and Monday, the trend remains generally positive, and several indices point to a further rise.
Before going into more detail about the recent bullish signals sent by Ethereum, and the factors that could continue to fuel its rise, let's go back to the reasons for the recent rebound of cryptocurrency.
Expectations about the Fed are decisive for the Ethereum trend.
The start of Ethereum's current bullish phase coincides with remarks made on October 21 by San Francisco Federal Reserve President Mary Daly. She did mention her desire to see interest rate hikes slow, which sparked speculation about a possible pivot of Fed policy toward a less hawkish stance.
Then, several disappointing US data have fueled expectations of an aggressive Fed month in tightening its policy, in the face of too great an impact on economic indicators, which raises fears of a recession.
However, expectations for this week's Fed meeting remain largely oriented towards a further rate hike of 0.75%, a likely event at more than 80% according to money markets.
How to trade Ethereum in front of the Fed meeting tomorrow night?
Therefore, when it comes to tomorrow's FOMC meeting, it is more the directions for the next meeting than this month's rate hike that will be likely to influence Ethereum and other cryptocurrencies.
For now, investors are anticipating equal chances of a rate hike of 0.50% or 0.75% for the Fed's last meeting of 2022 on December 14. We will therefore monitor in the Fed's statements tomorrow evening all the clues that will clarify these forecasts.
If the Fed softens its dovish rhetoric and expectations lean towards a 0.5% rate hike for December, the crypto market could be relieved, with the key to a further rise of Ethereum. If, on the contrary, the tenor of the Fed's words leads the market to predict once again a rate hike of 0.75% for the end of the year, it is the sellers who should prevail over the ETH.
Finally, it should be noted that it is also necessary to consider the unlikely scenario that the Fed will decide tomorrow evening to raise rates by only 0.50%. This would be a very strong dovish surprise that would provide a great reason to buy Ethereum immediately.
Bullish technical signals follow one another on ETH
Finally, from a graphical point of view, it will be recalled that bullish signals have been numerous on Ethereum in recent days. In particular, the sharp rise last Wednesday and Thursday allowed the cryptocurrency to extract itself from the top of a bearish channel that framed its evolution since the middle of August approximately, as seen in particular on the daily chart.
Ethereum also crossed the key threshold of $ 1500, and especially the 100-day moving average last week, further strengthening the now bullish profile of ETH, and inviting to invest in cryptocurrency for the long term.
In the short term, yesterday's high at $1662 and the current 200-day moving average at $1684 form an immediate resistance zone. Then the next objective will be the $1800 zone, and then the $2000 zone.
Finally, in the event of a fall in Ethereum, the area formed by the 100-day moving average at $1525 and the psychological threshold of $1500 will be the first important support to consider.
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