More work to reverse the bear run on the prince of cryptos! – It is the week of December that could bring about a decisive turning point for all asset classes. Because it turns out that major macroeconomic meetings are going to take place. Starting today with inflation for November in the United States, which is forecast at 7.3%. The next day, we will have the last meeting of the FED with a speech by Jérôme Powell eagerly awaited by investors on the subject of the evolution of monetary policy. And two days later, the ECB, which should raise rates by 50 basis points to bring them to 2.5%, could talk about reducing its balance sheet assets.
Of the three events, the first two seem the most important to many cryptocurrency investors. With a special mention for the price of Ethereum (ETH) which has lost feathers since its last ATH in November 2021. And despite better resilience compared to Bitcoin, a return of the Altseason remains an unrealistic probability given many unfavorable factors still in place.
Now, let’s review the latest technical analysis of ETH prices and then possible signals that may change – or not – the deal of his bear run.
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Ethereum in weekly units – Prices slightly above the descending line
At the time of writing, Ethereum prices keep in touch with the descending line. Even better, they sit slightly above although it remains timid in view of the last weekly candles. From there to what a positive signal would augur real grounds for hope on a recovery in hand of the bulls against the bears, it would be necessary to send heavy by getting rid of the next resistances on which the prince of cryptos is now clashing.
Besides, the $1,700 is giving the bulls a hard time at this stage. And it is not so surprising that the three failures below this level since last August reinforce the ETH and Chikou Span price stalls below the Kumo (Ichimoku Cloud). This would not make it possible to build the foundations for a neutralization of the bear market. Not considering the shadow of the future Kumo through its great thickness, would not argue for a pleasing first half of 2023 for the prince of cryptos.
However, the other good technical note to remember is that the Chikou Span is at the previous price level of the prince of cryptos. And as long as this signal remains for a few weeks, we could avoid a return to the lows of the year. And so, a throwback on the $1200 would validate the crossing of the descending line and a possible rebound towards $1400 and the Tenkan.
Otherwise, we would annihilate the rebound initiated since November 21st. With the breakout of $1200 which would precipitate the fall of Ethereum towards the support of $1000 before seriously glimpsing triple-digit prices.
Ethereum in daily units – A lack of bull support despite prices beyond the Tenkan and Kijun
In daily units, things are moving in the right direction. In effect, Ethereum prices confirm their favorable positions against Tenkan and Kijun in addition to getting rid of the downline in a narrow way. But the bulls would miss to catapult them towards the resistance of $1400. On the other hand, the proximity of prices to the lower limit of the Kumo or the Senkou Span A (SSA) would potentially slow down the continuation of the rebound. Which would coincide with a Chikou Span below the cloud and possibly below the descending line.
In any case, on the daily chart, going back over $1400 would mean that the prices of the prince of cryptos would reenter the interior of the Ichimoku cloud and be below its upper limit or the Senkou Span B (SSB).
In the event of a favorable conjunction on $1200 and $1400, we would be heading for a fourth attempt towards $1700. With the hope that the latter will finally lead to a favorable outcome, which itself would see the prices of Ethereum and the Chikou Span rise above the Kumo. Conversely, the breakout of $1200 would simultaneously push prices below the Tenkan, the Kijun, and the descending line with the idea of landing at $1000, or even below if the market context were to really go into a spin. .
In summary, the positive Ethereum price signals are definitely present from a chart perspective. But it is clear that they remain timid to stop the bears. Like it or not, the latter will not worry as long as there are no favorable polarity changes from resistance to support in order to materialize higher highs than the previous ones. Hence the importance of rallying and exceeding $1700.
This week’s macroeconomic meetings could be important since cryptocurrencies have particularly tasted since the start of the Fed’s monetary tightening. But given that inflation in the US is not coming down materially (pending today’s release), I doubt the US central bank will open the liquidity floodgates like in the good old days. Because precisely, its mandate in favor of a stability of consumer prices at 2% is far from being achieved under penalty of losing confidence vis-à-vis the financial markets.
Consequently, it would not be excluded that the rate hike cycle advocated by the FED will continue for a good part of 2023. In this case, the Ethereum bear run since its last ATH in November 2021 could begin. a third wave of correction in the event of a definitive breakout of $1000. And if this is the case, then many projects could disappear in favor of better exploitation on the different segments of the crypto industry.
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