Why is Ethereum (ETH) price down today?

Ether (ETH), the native token of Ethereum, has declined by nearly 7% today due to a combination of fundamental and technical reasons.

Fed’s hawkishness dampens Ethereum price

On June 15, Ether’s price decreased by 1.7%, settling at approximately $1,620, which was its lowest point in three months. This intraday decrease in ETH value was part of a larger downward trend over the course of the week, which was exacerbated by the Federal Reserve’s hawkish attitude the day prior.

The Federal Reserve left the benchmark interest rates unchanged due to a decrease in inflation. However, Jerome Powell, the Chairman of the Federal Reserve, indicated that they would increase rates more than anticipated in 2023 until consumer prices decrease noticeably and significantly.

ETH’s value has dropped by around 7.5% since Powell’s announcement.

In recent times, Ether has been seen to be a more volatile asset, exhibiting a strong positive relationship with the major US stock indices. This was further highlighted on June 14 and 15 as the Ethereum token dropped in line with the S&P 500, the Nasdaq Composite, and the Dow Jones.

The price of Ether has dropped over the past 24 hours, leading to a surge of leveraged long liquidations that topped $54.95 million on June 15, the highest among the top-ranked cryptocurrencies, according to Coinglass.

The open interest of Ether-related contracts decreased from nearly $6 billion on June 14 to $5.69 billion on June 15. This could be due to long traders selling ETH and closing their positions, which may have caused the price to fall further.

ETH price breaks below key support

The selloff of Ether on May 15 was hastened by the price dropping below a crucial support combination of multi-month ascending and horizontal trendlines as well as a 200-day EMA (the blue wave) close to $1,750.

ETH/USD has the potential to regain some of the losses it has incurred in June, as indicated by its daily relative strength index (RSI) falling below 30, which is an “oversold” area that generally precedes a bounce back or stabilization.

The long-term chart of Ether also suggests a possible revival in the future. Significantly, the ETH/USD pair is still trading above its 200-week exponential moving average (the blue line) near $1,600, which has been a psychological support level since March 2023.

The 200-day Exponential Moving Average support is in line with the lower trendline, creating what appears to be a bull flag.

Consequently, Ether has a high probability of increasing towards the flag’s upper trendline close to $1,850 in the event of a strong recovery from the lower trendline – which would represent a roughly 15% increase from the current price.

Should the ETH price break above the flag’s upper trendline, it could reach a next upside target of $2,500 in 2023.

Concerns about the USDT being depegged have arisen due to an imbalance in the Curve pool, to which Tether CTO has labeled as FUD.

In contrast, should the price of ETH fall below the lower trendline of the flag, it could lead to a further decrease in its value, particularly towards the support range of $1,400-1,450 seen in the first quarter.

Categorized in:

Tagged in: