The price of Ethereum has been in decline for four consecutive days following a strong rejection at the crucial level of $2,000. As a result, the cryptocurrency’s total market capitalization has dropped nearly 2% in the last day to $228 billion. However, the total volume of Ether traded during this period has increased by 58%. Despite the recent decline, Ethereum remains 58.70% higher year-to-date.
The overall cryptocurrency market has also been under pressure as the recent XRP-induced rally fades. The global crypto market cap has slipped to $1.2 trillion, while the total crypto market volume has increased by 40% in the last day. This decline in market sentiment is reflected in the Crypto Fear and Greed Index, which has dropped from a level of Greed (63) to a neutral level (57), indicating a lack of confidence among investors.
Both Bitcoin and Ethereum, the two leading cryptocurrencies, have been on a downward trend in recent days. Bitcoin, with the largest market cap, dropped below the important level of $30,000 after facing rejection at $31,000. At the time of writing, Bitcoin’s price was trading at $29,994. Similarly, Ethereum’s price has fallen below the crucial level of $1,900 to its current level of $1,899.20.
While Ripple Labs’ court case against the US Securities and Exchange Commission boosted market sentiment last week, economic headwinds continue to weigh on the markets. Despite a decline in recent key inflation data, traders are still anticipating a 92% chance of the US Federal Reserve implementing a 25-basis point interest rate hike this month. Several policymakers, including Fed Chair Jerome Powell, have expressed support for two more hikes this year.
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Investors are closely watching for economic data reports scheduled to be released this week. The UK and European Consumer Price Index (CPI) reports, which are expected to show a easing in inflation in both regions, will be released later on Wednesday. Additionally, the US retail sales report is expected to be released later on Tuesday.
Taking a closer look at Ethereum’s price technical analysis, the daily chart indicates a bearish trajectory over the past few days following a recent rally in the crypto market. Ethereum has failed to start a fresh rally above the key resistance level of $2,000. However, it remains slightly above the 50-day and 200-day exponential moving averages, as well as the 50-day and 100-day simple moving averages.
The Relative Strength Index (RSI) has slipped slightly below the signal line, and the Moving Average Convergence Divergence (MACD) indicator suggests further downside. Based on these indicators, it is likely that Ethereum’s price will continue to pull back in the coming sessions, with the next support level at $1,845. However, if the price manages to move above the important $2,000 level, it would invalidate the bearish thesis.
In conclusion, Ethereum’s price has experienced a decline in recent days, mirroring the overall downward trend in the cryptocurrency market. Economic headwinds and the anticipation of an interest rate hike by the US Federal Reserve have contributed to the lack of investor confidence. However, upcoming economic data reports and market developments could influence the direction of Ethereum’s price in the days to come.
