As a seasoned researcher with a background in economics and finance, I have witnessed the crypto market’s volatility firsthand, and Ethereum’s recent performance has been no exception. The approval of ETFs was expected to catapult Ether to new heights, but alas, the broader market sentiment took a bearish turn, dragging down even the mighty ETH.
Since the approval of Ethereum ETFs in July, its price has shown disappointing results instead of the expected surge to a record high. Despite initial optimism, the overall market mood turned bearish, causing Ether to follow suit. The future of cryptocurrencies remains uncertain as investors keep their eyes on the Federal Reserve’s decision to lower interest rates by at least 0.25%.
Ethereum Price Movers: ETH Supply Rise, FOMC Minutes and Fed Rate Cut
The recent lethargic and ordinary fluctuations in Ethereum’s price can be linked to a substantial drop in network gas fees, as per the latest report by Kaiko. This decline in gas fees to a five-year minimum was driven by increased activity on layer 2 protocols and the Dencun update in March.
Lower transaction fees on the Ethereum network can be beneficial for users, but it may have significant effects on Ethereum as a asset because it means less Ether is destroyed through burning, which over time increases the total supply of Ether tokens. According to Kaiko’s data analysis, the total supply of Ether has been steadily rising since April, even taking into account new developments such as the approval of spot ETFs. Keep in mind that increased demand could potentially slow down any short-term price growth for Ethereum.
In 2024, macroeconomic factors are expected to significantly influence Ethereum’s price forecast, given the recent sell-off and difficulties in recovering losses sustained over the last fortnight. The minutes from the FOMC meeting on August 24 will provide insights into the future policy direction, as well as the decision regarding a potential interest rate cut in September.
It’s anticipated that Federal Reserve Chair Jerome Powell will attend the Jackson Hole Symposium in Wyoming on August 21st. This yearly gathering, organized by the Kansas City Fed, gathers experts and scholars to deliberate on critical economic policy matters. Among all the speeches, Jerome’s will be particularly significant as it will touch upon the current economic situation of the United States, focusing on concerns about a recession and suggestions for interest rate reductions.
ETH Price Analysis: ETH Sends Mixed Signals
The cost of Ethereum remains above the $2,600 support level, moving horizontally between approximately $2,500 and $2,800. Given the current circumstances, there could be further potential for a price drop, potentially reaching $2,400 to accumulate more market liquidity.
When the 20-day Exponential Moving Average (EMA) falls beneath the 200-day EMA, it indicates a rising pessimism among traders, often referred to as a “death cross” pattern. Additionally, Ethereum is currently below all significant moving averages, including the 200-day EMA, which underscores its bearish trend.
Confident traders, who are optimistic about the market, will maintain their long-held investments as long as the Moving Average Convergence Divergence (MACD) continues to indicate a buy signal. Furthermore, they will boost their investment in Ethereum if the MACD approaches the neutral zone, anticipating a new surge of bullish momentum in positive territory. A bounce back above $2,800 and $3,000 could lead to a significant increase toward $4,000 and the all-time high (ATH).
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2024-08-19 23:06