Ethereum, one of the leading cryptocurrencies in the market, has been facing significant downward pressure in recent days ahead of the Federal Reserve’s two-day monetary policy meeting. The price of Ethereum has been struggling to stay above the crucial level of $1,900, indicating a decline in market sentiment. Currently, Ethereum is trading slightly lower at $1,855.
The decline in Ethereum’s price can be attributed to various economic headwinds, with the Fed’s policy meeting being a major factor. The global crypto market cap has experienced a crash, dropping to $1.17 trillion over the last few days. Furthermore, the total crypto market volume has also decreased. Bitcoin, the largest cryptocurrency by market cap, has fallen below the critical $30,000 level, primarily influenced by the weak sentiment in the crypto market.
The Crypto Fear and Greed Index, which measures investor confidence in the sector, has been continuously dwindling. Last week, the index was at a Greed level of 63, but it has now fallen to a neutral level of 52, indicating that most investors are adopting a cautious approach.
Adding to the economic uncertainties, the US Treasury yields have risen as the Federal Reserve kicks off its meeting. The meeting is expected to conclude on Wednesday, with the central bank announcing its interest rate decision. Market expectations suggest a 98.9% chance of a 25 basis points interest rate hike after the meeting.
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Investors are keenly observing the guidance provided by the central bank and paying attention to any comments made by Fed Chair Jerome Powell. They are searching for clues about the future path of the Fed’s monetary policy. Additionally, the European Central Bank (ECB) and the Bank of Japan are also scheduled to hold meetings later this week, during which their respective interest rate decisions will be announced.
Another aspect that investors are closely monitoring is the release of key data points. On Friday, the Fed’s favorite inflation gauge, the personal consumption expenditures (PCE) index, will be published. Additionally, data on the CB Consumer Confidence Index for July is expected to be released today.
Analyzing the daily chart, the Ethereum price has been on a steep decline in recent days after facing strong resistance at the important level of $2,000. During this period, ETH has dropped below the 50-day and 200-day exponential moving averages. The Relative Strength Index (RSI) has moved below the neutral line, indicating a bearish sentiment. The Moving Average Convergence Divergence (MACD) indicator also points to a sell signal, and the Bollinger Bands have narrowed, suggesting a decrease in volatility.
Considering these factors, it is likely that the Ethereum price will experience further downward pressure in the short term, mainly due to concerns about a hawkish Fed. In this scenario, the next support levels to watch are $1,845 and $1,775. On the other hand, if the price manages to surpass the bullish support level at $1,920, it could potentially rise to $2,000, invalidating the bearish outlook.
Overall, the current market conditions, influenced by the Fed’s policy meeting and economic uncertainties, have contributed to the decline in the price of Ethereum. Investors are closely following various factors, including central bank decisions, economic data, and market sentiment, to assess the future trajectory of Ethereum and the broader cryptocurrency market.
