- Ethereum’s price faces three hurdles on its path to recovering from the recent slump.
- Amid the increase in institutional inflow to Ethereum funds, experts believe the Merge is the key to improved sentiment.
- The next major support for Ethereum is near the $1,000 level; dropping below this could bring $965 into play.
Ethereum (ETH) price wiped out its gains after news of the US CPI increase. The Federal Reserve released US inflation data and Ethereum price tumbled in response. There are three key hurdles that the largest altcoin faces. The US inflation data, the bear flag in the ETH/BTC chart since the beginning of June 2022, and the breaching of stable support at $1,041.
Based on data from Santiment, there is an improvement in sentiment among Ethereum holders. However, analysts attribute this to the increasing probability of the Merge. After the successful completion of Ropsten and Sepolia, the altcoin is one test away from the transition to proof of stake. Once Ethereum developers successfully complete the Goerli test, the Merge will be imminent.
Analysts noted that FTX was one of the biggest contributors to selling pressure on Ethereum and other cryptocurrencies. FTX exchange funded traders ready to convert their assets for a high annual yield and this placed the Ethereum price under stress. Ethereum struggled to sustain a level of support above the local average.
Meanwhile, crypto traders continue to await the release of June’s Consumer Price Index, the US inflation gauge, on Wednesday for hints on how active the Federal Reserve would need to be to ease the rate of consumer price increases.
Interestingly, the Ethereum price faces the looming threat of decline from two other hurdles that appeared on the price chart first in June 2022. The recent rejection is considered the result of the two, pushing Ethereum’s price lower.
Ethereum’s price has remained largely rangebound from $1,200 to $880 since mid-June 2022. The recent correction pushed Ethereum to the midpoint of the range at $1,000. If Ethereum’s price loses support at $1,000, it could witness a sharp decline. The price could slip to support at $965.
If Ethereum’s price recovers from a drop below $1,000, it could resume its climb to the $1,280 level. This would invalidate the bearish thesis and the Ethereum price could break out.
Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CQ. No information in this article should be interpreted as investment advice. CQ encourages all users to do their own research before investing in cryptocurrencies.
