- Ethereum’s price is not having a great start to the week despite excitement over the weekend.
- The asset’s recent price dip may be linked to macroeconomic factors and whale activity.
- A price bounce may be on the horizon, but there are several factors investors must watch.
Ethereum ‘s price can not catch a break.
Over the weekend, the asset looked set to shake the doldrums of recent weeks as the Depository Trust and Clearing Corporation (DTCC) stirred hopes of spot Ethereum ETF approvals by listing Franklin Templeton’s planned offering on its website. Heading into the new week, however, this excitement appears to have fizzled out amid looming U.S. economic data and whale activity.
Read More
Dogecoin Whales Inject Coinbase With 457M DOGE: Dump Coming?
Crypto Ban Coming: Russia Clamps Down on Digital Assets
Why Ripple Decided to Replace XRP with USDT for U.S. Clients
Ethereum Takes a Dive
Ethereum surged about 7% this weekend from lows of about $3,074 to highs of about $3,287. At the time of writing, however, about half of the weekend gains have been given away, as the asset trades around $3,152.
ETH/USD 4-hour candle chart. Source:
TradingView
The market jitters come as the U.S. Federal Reserve is set to decide on interest rate changes on May 1. With the CME FedWatch Tool predicting a 97.1% chance that rates will remain unchanged, risk asset investors are again forced to face the fact that anticipated rate cuts may not be coming anytime soon.
Sponsored
In addition to the Fed rate decision, the employment rate data for April 2024 is also expected this week, specifically on May 3, which could influence future Fed interest rate decisions.
Market speculators keenly watch the Fed interest rate decision as it influences the ease of accessing capital for investment. With the U.S. experiencing higher-than-desired inflation over the past year, the Fed has moved to raise and keep interest rates higher to discourage excess capital flows. While this move may help to bring down inflation, it also hurts perceived risk assets like Ethereum, which tend to thrive when investors have capital to spare.
Sponsored
In addition to the market nerves brought on by this week’s U.S. economic data, recent movement by a long-dormant wallet linked to the Ethereum Foundation has also stirred sell-off concerns.
On Sunday, April 28, crypto smart money tracker Lookonchain highlighted that the wallet had moved for the first time in nine years, sending out 2,000 ETH worth over $6.6 million. The address had not moved since it received the sum from the Ethereum Foundation in September 2015. At the time, the received sum was worth less than $200.
Can ETH Rebound?
Ethereum’s daily time frame chart suggests that the asset is rejecting off the top of a month-long descending channel chart pattern as part of what looks to be a bull market correction. At the same time, the asset trades near a weekly support range between $3,135 and $2,882.
Ethereum daily candle chart.
Source: TradingView
The combination of the chart pattern and the near-support level suggests a price bounce could be on the horizon. This bounce, of course, would depend on whether bulls can hold the support level.
Possible catalysts for a bullish move include the recent drop in Ethereum fees . At the same time, holders would want to keep an eye on whether the SEC would eventually dash hopes of a spot ETF approval by May 2024.
On the Flipside
- While the days before economic releases are typically characterized by muted price action, the releases tend to cause significant market volatility.
- Ethereum is not the only crypto asset experiencing a market correction ahead of this week’s economic releases. At the time of writing, CoinMarketCap data suggests that assets like BTC, BNB, and SOL are also experiencing price declines of 2%, 2.5%, and 4.67%, respectively.
Why This Matters
Ethereum is the second largest crypto asset in terms of market capitalization. Following the excitement over the weekend, investors must understand the reason for the recent dip to make informed market decisions.
