Ethereum Rises with the Help of a Contained USD

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ETH/USD Analysis

Ethereum has managed to stabilize after its two-month drop and rises today, extending last week's advance. This is in part due to the USDOLLAR's lackluster performance, which could not benefit form risk aversion emanating from the Middle East conflict and the rising US yields, a traditional driver for the greenback. A series of dovish Fed commentary that diverged from the higher-for-longer narrative did not help either.

Furthermore, the crypto industry appears optimistic around the eventual launch of Bitcoin ETFs, after a panel of the District of Columbia Court of Appeals recently ruled against the SEC's decision to reject the relevant Grayscale filing [1]. Market's positive reaction to a report that BlackRock's iShares spot Bitcoin ETF was approved by regulators was telling, but the publication retracted the story, as it was false. [2]

In a potentially significant technical move, ETH/USD rises today above the 200EMA, stepping into daily Ichimoku Cloud. This brings the ascending trend line from its record highs (at around 1,890) in the spotlight, but fresh impetus will likely be required and the upside continues to look unfriendly.

On the other hand, the altcoin's recent visit above the EMA200 was short-lived and the RSI points to the most overbought conditions since, which had then sparked a drop. As such, there is risk for a similar sub-EMA200 outcome and new October lows (1,517), although a breach of 1,367 has a higher degree of difficulty.

In any case there, there a series of high-impact event this week that can determine the trajectory of the pair, including Thursday's US PCE inflation update.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 22 Oct 2023 https://www.fxcm.com/markets/insights/the-crypto-industry-scored-another-victory-against-the-sec-helping-bitcoin/

2

Retrieved 26 May 2024 https://cointelegraph.com/news/clarification-sharing-false-spot-bitcoin-etf-news

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