Ethereum price is on the verge of confirming a rejection from a potential bull market support provided by the 200-weekly Exponential Moving Average (EMA). Declines below this support – now resistance is exerting pressure on the next buyer congestion area at $1,600.
Bulls must move and act quickly to keep sellers off this area, otherwise, they risk exacerbating the bearish situation.
At first, the Federal Open Market Committee’s (FOMC) decision to halt interest rate hikes for September appeared to have already been priced in by the crypto market. However, investors seem concerned by the remarks made by Jerome Powell, the Fed Chair on the need for more rate hikes, or at least one before the year ends.
“We want to see convincing evidence really that we have reached the appropriate level, and we’re seeing progress and we welcome that,” Powell said. “But, you know, we need to see more progress before we’ll be willing to reach that conclusion.”
Is This The End of The Road for Ethereum Bulls?
The recent move above the 200-week EMA (purple) at $1,625 to $1,650 was a significant signal that bulls had the reins. With this level now acting as resistance, bulls must put up a barricade or steady their speed breaks to reduce the likelihood of a bigger sell-off.
The Moving Average Convergence Divergence (MACD) indicator although moving sideways at the mean line (0.00) still dons a sell signal. As long as the blue MACD line holds below the red signal line, a rally will remain a pipe dream.
That said, losses below $1,600 immediate support could sweep through price levels seen last in March for the second time in September. Ethereum price bounced off $1,530 last week but lost steam around $1,650, pausing the uptrend.
If the next support at $1,600 refuses to budge, Ethereum price bulls will have another chance at patching up the uptrend.
Until ETH reclaims the 200-day EMA support/resistance, the 21-week EMA (red), and the 100-week EMA (blue), the time won’t be ripe for a bull market rally for gains above $2,000.
Ethereum Futures ETF Approval Could Signal A Rally
Grayscale Investments made headlines this week for filing a proposal with the Securities and Exchange Commission (SEC) to offer a futures-based ETH exchange-traded fund (ETF). This is the second filing by Grayscale for ETH futures ETF as the firm seeks to increase the chances of getting the regulator’s approval.
Companies have been expressing interest in futures-based Ethereum ETFs following reports that the SEC might greenlight several proposals in October.
Eric Balchunas, a senior ETF analyst at Bloomberg said on August 10 that the SEC tends to ask potentials to withdraw their applications five to six days from the first filing, but this time no communication has been made in that regard.
In the past the SEC has told Ether Futures ETF filers to withdraw 5-6 days after the first filing hit. We are now on Day 13 and no withdrawals. Not home free yet but very good sign. As we predicted these will likely hit market in mid-October. https://t.co/22WM1HghEp
— Eric Balchunas (@EricBalchunas) August 10, 2023
Nevertheless, it is too early to tell if the SEC will greenlight the ETFs, considering its longstanding attack on the crypto market since the FTX implosion in November.
Ethereum price may continue to struggle with upholding the uptrend until a market-changing event like the approval of the futures ETH ETF triggers immense interest in the token, resulting in a major rally.
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