Ethereum’s native token Ether (Ethereum) It reached a record high of around US$4,867 in early November, but plummeted by nearly 20% a month later due to rising profit-taking sentiment.
And now, as Ethereum price Holding $4,000 as a key support level, the risk of further selling is emerging in the form of multiple technologies and basic indicators.
ETH price rising wedge
First, the ether seems to have broken through”Rising wedge,” A bearish reversal pattern that occurs when the price is trending upwards within the range defined by two rising but converging trend lines.
In short, as the price of Ether approaches the apex of the wedge, it is likely to break below the lower trend line of the pattern. Many technical chart experts believe that this move indicates more losses in the future. In doing so, their profit target appears at a length equal to the height of the largest wedge when measured from the breakthrough point.
Therefore, the downward target of the rising wedge of Ether is close to $2,800, which is also close to its 50-week exponential moving average (50-week EMA).
For example, Bitcoin (Bitcoin) Is the leading cryptocurrency in market capitalization. After hitting a record high of $69,000 in early November, it has fallen by 30% in the past month, which is much higher than the decline of Ether in the same period. This has prompted many analysts to refer to Ether as “hedge“Fighting Bitcoin’s price decline-also because ETH/BTC rebounded to its highest level in more than three years.
But this does not eliminate the fact that the recent price increase of Ethereum coincides with the decline in its weekly relative strength index (RSI), which shows that the divergence between price and momentum is growing.
In addition, the recent ETH price correction also caused the RSI oscillator to fall below 70, which is a classic sell indicator.
Fed “dot map”
Before the Fed’s two-day policy meeting on December 14th, there will be more signs of downside in Ethereum, and the Fed will discuss how fast it may take. Reduce the $120 billion monthly asset purchase plan Gain enough flexibility for a possible interest rate hike next year.
Just last month, the Federal Reserve announced that it would reduce bond purchases at a rate of 15 billion U.S. dollars per month, indicating that the stimulus measures will eventually cease in June 2022.Nevertheless, a series of recent market reports show that the job market and Inflationary pressures continue to rise Prompted Fed officials to end the cuts “maybe a few months earlier.”
The 20 CenBanks will meet next week. As inflation continues to rise, the Fed, the European Central Bank, the Bank of Japan, and the Bank of England will make the final decision in 2021, and they are jointly responsible for half of the world economy. CenBank’s balance sheet has risen in tandem with ATH, but divergence may now appear. https://t.co/GgOLGCNbjR pic.twitter.com/mrrhwUVcet
-Holger Zschaepitz (@Schuldensuehner) December 12, 2021
The Financial Times survey of 48 economists also adjusted market expectations expect The stimulus plan will end in March 2022, and the majority of respondents are in favor of raising interest rates in the second quarter.
Period lLoose monetary policy After March 2020, it will help push ETH prices up by more than 3,330%. Therefore, according to some analysts, the increased likelihood of dwindling will certainly hinder the current rebound, even if not the entire bull market.
From then on, I expect the Fed to take a very aggressive approach because they will recognize that we are in a bubble and need to take some extreme measures.
Then we got a bear market for many years.
-KALEO (@CryptoKaleo) December 10, 2021
The market expects the Fed to update its policy statement and summary of economic forecasts (SEP) this week. In doing so, more central bank officials will adjust the “dot map” to support early interest rate hikes to combat rising inflation.
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