The value of Ether increased significantly after reaching its low of USD 880, but bulls and whales took that opportunity to buy cheaply. An inverted Head-and-Shoulders pattern in the 4-hour timeframe will bring benefits shortly, but the price will fall to a support zone at USD 1,200.
Over the last few days, the crypto market has made a modest recovery. The Ethereum cryptocurrency Ether (ETH) has been an altcoin that has attracted the most attention. Many predicted it would drop below USD 1,000 again, causing a panic, but the bulls took the bad news to drive prices higher.
ETH is trading at around USD 1,202 and has accumulated a 6.9% gain over the last seven days. While its daily trading volume is above USD 12.86 billion, its market capitalization is about USD 145.47 billion, according to CoinGecko.
US Economic Reports Influences the Recovery of the Ether Price
The price of Ether increased significantly after reaching its lowest level of the year at USD 880. However, that pullback attracted bulls and whales, who took the opportunity to buy cheaply. The recent reports on the US economy were another factor that motivated the bulls to acquire ETH.
The economic changes in the United States have affected Ether, the same as other markets. For example, the rate hike and the aggressive policy by the Federal Reserve (Fed) have influenced the ETH price during 2022. However, a recent composite report from US purchasing managers showed a decrease in manufacturing activity to a 5-month low.
The chief investment officer of FlowBank explained to the Wall Street Journal this should lead the Fed to soften up. However, the recovery in the price of cryptocurrencies may not last long as banks may continue to hike rates.
Besides, ETH 2.0 developers ask investors for patience as they are working on some details. They have had to postpone the launch aiming to have time to save ETH and avoid a crash below USD 1,000.
The Analysis of the Price of Ether on 4-Hour Charts
The price action of Ether in the 4-hour timeframe shows an inverted Head-and-Shoulders pattern, which will bring benefits shortly. However, the price will fall to a support zone at USD 1,200, marked by the middle margin of the ENV channels.
If prices retrace to the bottom margin of the ENV channels, there might be a trend reversal to the downside.
According to the charts, the price has not yet broken through the ascending channel of the trend. In addition, the RSI scores indicate there will be a slight drop to the above levels. The Relative Strength Index showed overbought signals, suggesting that a pullback to take profit is healthy to continue the trend.
In conclusion, there might be a pullback for the bulls to gain strength and retest resistance at USD 1,275. If the price ascends to that level, it might be heading for USD 1,500 in the medium term. However, if the aggressive Fed policy continues, there might be a new crash.
By Alexander Salazar
