Ethereum pulls back into a key trendline as risk sentiment takes a hit after Trump's remarks on Iran

<p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">FUNDAMENTAL OVERVIEW</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;"> </p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;">We haven’t got major idiosyncratic catalysts for Ethereum this week as the cryptocurrency continued to rally just by inertia. As a reminder, most cryptocurrencies rallied on Friday after a <a href="https://crypto.news/cftc-submits-crypto-market-framework-for-white-house-review/" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">CFTC crypto rulemaking submission on Thursday became public</a>.The filings were submitted for regulatory review after the CLARITY Act failed to advance in the Senate. </p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;">The CFTC effectively signalled that it intends to move forward with a crypto market framework using its existing authority rather than waiting for Congress. The breakout of the month-long range has also contributed to the bullish momentum on broad short-covering.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">On the macro side, the significant drop in oil prices on growing expectations of a de-escalation and an earlier end to the conflict supported risk assets. Yesterday, though, Trump poured some cold water on those expectations as he repeated that the US would make a deal with Iran after the November elections. The general risk sentiment started to deteriorate after that.</p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: normal; font-size: 15px;">If the de-escalation continues and markets start to sense an earlier end to the conflict, then oil prices will continue to drift lower and support risk assets like cryptocurrencies. Conversely, if the US-Iran talks fail again and we see a re-escalation, we can expect crude oil to surge and weigh on risk sentiment, ultimately putting pressure on Ethereum.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;"> </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">ETHEREUM TECHNICAL ANALYSIS – DAILY TIMEFRAME</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;"></p><p>On the daily chart, we can see that <a href="https://www.tradingview.com/symbols/ETHUSD/" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">Ethereum</a>stalled around the 2,800 level. We have a new major upward trendline now that could act confluence to the 2,560 support. If we get a pullback into the support, we can expect the buyers to step in with a defined risk below the trendline to position for a rally into the 3,000 level. The sellers, on the other hand, will want to see the price breaking below the trendline to pile in for a drop into the 2,360 level next. </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">ETHEREUM TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;"></p><p>On the 4 hour chart, we have an upward trendline defining the recent bullish momentum. The buyers will likely continue to lean on the trendline with a defined risk below it to keep pushing into new highs. The sellers, on the other hand, will look for a break lower to extend the pullback into the 2,560 support next.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">ETHEREUM TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;"></p><p>On the 1 hour chart, there’s not much we can add here but we have a minor downward trendline defining the current pullback. If the price bounces and moves into the downward trendline, we can expect the sellers to lean on it with a defined risk above it to target a break below the upward trendline. The buyers, on the other hand, will look for a break higher to increase the bullish bets into the 3,000 level next.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">UPCOMING CATALYSTS</p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 103%; font-size: 15px;"><a href="https://investinglive.com/EconomicCalendar" rel="follow">Today</a>we get the Flash US PMIs, while tomorrow we have the Trump-Xi meeting. The focus will remain on US-Iran developments though.</p> This article was written by Giuseppe Dellamotta at investinglive.com.