Wednesday was a bearish session for Ethereum (ETH). Fed fears and regulatory risk jitters weighed heavily, while FOMC meeting minutes limited the downside. However, ETH was in positive territory this morning.
Ethereum (ETH) fell 1.02% on Wednesday. Following a 2.58% drop on Tuesday, ETH ended the day at $1,643. The bearish session left ETH below the $1,700 level for the first time in seven sessions.
A mixed start to the day saw ETH rally to an early high of $1,667 before pulling back. Missing the first major resistance level (R1) at $1,706, ETH slid through the first major support level (S1) at $1,625 to a late-afternoon low of $1,595. However, finding support at the second major support level (S2) at $1,590, ETH rallied to end the day at $1,643.
FOMC Meeting Minutes Ease Fed Fears of Providing Price Support
On Wednesday, fear of the Fed eased as investors responded to the latest FOMC meeting minutes. The minutes were less aggressive than expected, supporting the NASDAQ Composite Index and a bullish finish for the broader crypto market.
However, the minutes are dated. Since the FOMC meeting, US Employment Report, CPI Report, ISM Non-Manufacturing PMI Survey and Retail Sales figures support a more hawkish Fed policy outlook.
More upbeat US statistics and dovish inflation numbers would likely drive policy outlook bets higher for longer. However, easing fears of a US economic downturn have limited the Fed’s impact on ETH and BTC in the short term.
Ethereum (ETH) Price Action – Technical Indicators
A bullish start to the day saw ETH rise from an initial low of $1,637 to a high of $1,674. The first major resistance level (R1) at $1,675 culminated higher.
ETH needs to avoid a drop through the $1,635 pivot to re-target the first major resistance level (R1) at $1,675 and $1,700. A move through R1 would signal a breakout session. However, updates from the Shanghai hard fork and crypto news leads should support ETH to support a breakout.
In the event of a prolonged rally, the bulls would likely test the second major resistance level (R2) at $1,707 and resistance at $1,750. The third major resistance level (R3) sits at $1,779.
Looking at the EMAs and the 4-hour candlestick chart (below), it was a bullish sign. Ethereum has broken above the 50-day EMA, currently at $1655. The 50-day EMA has turned away from the 100-day EMA, and the 100 day EMA has broken out from the 200-day EMA, providing bullish signals.
A hold above the 50-day EMA ($1655) would support a break of R1 ($1675) to target R2 ($1707) and $1750. However, a drop through the 50-day EMA ($1,655) would give the bears a run on the 100-day ($1,634) and S1 ($1,603). A drop through the 50-day EMA would send a bearish signal.
By Audy Castaneda
