Ethereum struggles amid macro headwinds, but renewed US-Iran hopes limit the downside

<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, but we did have it on the macro side. The positive risk sentiment stemming from the sharp decline in oil prices prior to the UN General Assembly had been supporting the crypto market on easing inflation and rate hike concerns. </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">Unfortunately, Trump poured some cold water on expectations of an earlier end to the Iran war after he repeated that the US would make a deal with Tehran after the November elections. Oil prices, Treasury yields and the US dollar started to rise again after his remarks and weighed risk assets like cryptocurrencies. </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">The optimism returned yesterday, though, following the news that Iran has put an offer on the table, promising to reopen the Strait of Hormuz within seven days if the US meets its terms. Iran's Foreign Minister Araghchi is staying in New York over the weekend to await a US response. </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">A breakthrough would be positive for Ethereum as the aggressive rate hike bets will likely get pared back on easing inflation concerns. A prolonged stalemate or even a re-escalation, on the other hand, will likely continue to put pressure on the crypto market on tightening financial conditions.</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></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>has been pulling back in the past few days as macro conditions turned negative. We have a major upward trendline around the 2,560 support that makes that technical zone very strong. 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></p><p>On the 4 hour chart, we can see that the bearish momentum increased as the sellers piled in on the break below the upward trendline that was defining the bullish momentum. From a risk management perspective, the buyers will have a better risk to reward setup around the support and the major trendline to keep targeting new highs, while the sellers will look for a break below it to extend the correction 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 – 1 HOUR TIMEFRAME</p><p></p><p>On the 1 hour chart, we have a minor resistance zone around the 2,710 level. The sellers will likely step in there with a defined risk above the resistance to keep pushing into the 2,560 support. The buyers, on the other hand, will want to see the price breaking higher to pile in for a rally into new highs.</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 don’t have anything on the agenda, but traders will keep a close eye on US-Iran developments after yesterday’s proposal of reopening the Strait of Hormuz under certain conditions.</p> This article was written by Giuseppe Dellamotta at investinglive.com.