John Isige
The dilapidated market conditions from last week appear to have transitioned to the new week, with the cryptos generally wallowing in red waters. Ethereum price continues to lose key levels, although gradually – to trade at $1,563 at the time of writing from a new 2023 high of $1,745.
Experts believe this is a temporary pullback, with Ether expected to take the fight to $2,000 soon. A weakening dollar coupled with lower interest rates is one of the factors likely to help Ethereum price resume the uptrend.
In the meantime, bulls must prepare to uphold ETH’s potential support areas above $1,500 if not $1,550. On the upside, bulls should not lose sight of the seller congestion at $1,800 and $2,000, respectively.
Pushing those two key price levels in the rearview mirror would be the easiest way to keep retail investors interested in ETH ahead of the next rally toward $3,000.
How a Weaker US Dollar and Bitcoin Can Help Ethereum Price Climb to $2,000?
The cryptocurrency market flipped bullish in late December and for some cryptos in Early January. Bulls were exceptionally aggressive to the extent that most tokens recovered to pre-FTX implosion levels.
Trading volumes that were significantly affected by the messy fall of Sam Bankman-Fried’s exchange shot up in a spectacular showdown, convincing investors and some analysts that crypto winter was over and the bull market was here.
Ethereum price is now trading 32% from $1,189 at the beginning of the year, and 45% from its lowest price level in November, days after FTX declared bankruptcy.
For much of February the dollar and rates went higher, while crypto hung in there. If the former two start to drift lower, $BTC could push through $25K, and if $ETHBTC pushes alongside that we could get another round of fireworks.
— Chris Burniske (@cburniske) March 5, 2023
The retracement from highs around $1,745 can be attributed to pressure from investors booking profit activities but more specifically from the uncertain market conditions since early February and the mounting regulatory pressure from United States’ regulatory agencies.
Despite the Federal Reserve hiking interest rates by 0.25% in early February, other economic indicators like the Consumer Price Index (CPI), and the non-farm payroll and unemployment report suggested that inflation was still a major issue.
According to Chris Burniske, the co-author of Cryptoassets, cryptos bled in February due to a strengthening US dollar and increased interest rates. However, there was a chance that if the dollar weakens and interest rates are lowered, Bitcoin price would regain momentum for an uptick to $25,000.
A positive scenario would play out for Ethereum price if ETH/BTC trading pair rises in tandem with the largest crypto. The pioneer smart contracts protocol, ETH would then capitalize on the momentum to attack its point of control at $2,000.
Evaluating Ethereum Price Short-Term Profitability – Daily Chart
Ethereum price is boxed between a rock and a hard place with movement to the upside limited by the 50-day Exponential Moving Average (EMA) (line in red) at $1,570 while its downside is protected by the 200-day EMA (line in purple) at $1,546.
Support by the latter moving average must hold to prevent investors from panic-selling as ETH price slides, eyeing $1,400. On the other hand, a break and hold above two key levels at the 50-day EMA and the seller congestion at $1,600 is required to give bulls another lifeline to $1,800 and $2,000, respectively.
The second attempt to pierce through resistance at the upper falling trendline saw Ethereum price temporarily give up the goal to lift beyond $2,000 at $1,745. Therefore, the next attack must have enough liquidity, otherwise, this might become the new point of control going into the second quarter.
Already the Money Flow Index (MFI) which tracks inflow and outflow volumes in ETH markets adds credence to the dominant selling pressure.
Its current position at 42.80 – below the midline in the neutral zone implies Ethereum price is dealing with limited liquidity – a situation likely to continue stifling its recovery chances.
Where is Ethereum Price Headed – 4-Hour Chart
Ethereum price presents a different picture in the four-hour time frame, as bulls push for recovery from support established at $1,550.
The chart below shows the formation of a green engulfing candle, bolstered by a fresh buy signal from the Moving Average Convergence Divergence (MACD) indicator.
Day traders may settle for $1,550 as a suitable entry position but would be advised to closely watch the momentum indicator. In other words, the trend reversal could hold with the MACD line in blue staying above the signal line in red. Furthermore, the MACD should be closing in on the mean line to validate a sustainable uptrend.
Some investors may want to close their positions at $1,600 – a seller congestion region cemented by the presence of the 50-day EMA (line in red) and the 100-day EMA (line in blue).
Following a brief retracement, the same area could allow new entries as Ethereum price grinds toward $1,800 and $2,000.
Nevertheless, some investors believe the bullish setup comes with a twist that could see cryptos drop by 50% before the next bull market.
So far this is nothing more than a bounce within the “boring low” part of the cycle & correlates with stocks. If this were the beginning of the bull, we would have already pierced higher through 2k 30k. Your optimism was well timed, but more 50% drops may still happen.
— DaveLevine0com (@DaveLevine0com) March 5, 2023
For instance, DaveLevine0com, an e-commerce and crypto investor reckoned while replying to Burniske’s tweet that “this is nothing more than a bounce within the “boring low” part of the cycle and correlates with stocks.”
He adds that if this was a signal for the bull market Ethereum price could have reclaimed $2,000 already with Bitcoin price piercing through $30,000.
Investors would be waiting for the release of key economic data including the decision on interest rate hikes following the FOMC meeting later this month.
Ethereum Alternatives To Buy Today
Before buying the Ethereum dip, you may want to check out some of the best crypto presales for 2023. A dedicated team reviews the list of the best altcoins to buy, bringing to your attention possible options to diversify your crypto portfolio.
Fight Out (FGHT), one of the leading crypto presales for 2023 surpassed the $5.16 million market. Investors scooping up FGHT tokens before the project lists on the exchanges for the first time on April 5 see potential in the move-to-earn (M2E) sector.
Fight Out is an up-and-coming fitness-oriented ecosystem, tapping the power of Web3 to help people lead healthy lifestyles. Users in the ecosystem also earn in an in-app currency called REPS when they complete daily workouts and challenges.
Fight Out stands out for eliminating the need for expensive NFTs to access the metaverse and provide community members with personalized fitness programs.
Governments around the world are concerned about climate change. C+Charge (CCHG) is the world’s first on and off-chain platform to open up the carbon credit industry to individuals, mainly those driving electric vehicles.
C+Charge is building an application to revolutionize the EV charging market and support a global standard for the same. Users in the ecosystem will earn carbon credits for paying at charging stations with CCHG. The carbon credits earned can then be used to mint tradable NFTs. Over $2.23 million has been raised in a presale, expected to close in late March.
Related
- Metropoly Makes Real Estate Affordable Again, Presale Continues to Draw Heavy Investment
- Animoca Brands CEO Says Hostility to Crypto is a Western Thing And Asia is More Open
- Uniswap Has Launched a Polished Self-Custody Crypto Wallet But Apple Won’t Let it on its App Store
Fight Out - Next Big Train-to-Earn Crypto
- Backed by LBank Labs, Transak
- Earn Rewards for Working Out
- Level Up and Compete in the Metaverse
- Presale Live Now - $5M Raised
- Real-World Community, Gym Chain
This article was written for Business 2 Community by John Isige.
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