Ethereum Price Hovers Around $3,100: Can ETFs Avoid a Dip Below $3,000?Ethereum's price fluctuated around the $3,100 level on August 1, 2024, as the market reacted negatively to the Fed's pause on interest rate hikes. The Fed's rate pause, which had initially spurred ETH's surge to $3,100, triggered negative reactions in risk asset markets, including stocks and cryptocurrencies
Ethereum Price Hovers Around $3,100: Can ETFs Avoid a Dip Below $3,000?
Ethereum's price fluctuated around the $3,100 level on August 1, 2024, as the market reacted negatively to the Fed's pause on interest rate hikes. The Fed's rate pause, which had initially spurred ETH's surge to $3,100, triggered negative reactions in risk asset markets, including stocks and cryptocurrencies.
On July 31, the Fed unanimously decided to keep its monetary policy rate unchanged at 5.25% to 5.5%. Following the announcement, ETH relinquished gains fueled by the previous week's ETF frenzy and market excitement sparked by Donald Trump's remarks. ETFs have witnessed four consecutive days of outflows this week.
Following the release of dovish non-farm payroll (NFP) and consumer price index (CPI) data on July 5, many crypto investors anticipated a Fed rate cut on July 31. As these hopes were dashed, a large-scale liquidation in the crypto market sent ETH's price plunging to $3,100.
Around noon EDT on August 1, ETH experienced a 15.08% decline. Meanwhile, TOTAL3 charts revealed that the global altcoin market shrank by less than 10% during that period. This clearly indicated that Ethereum's price had lagged behind the average altcoin industry performance since the beginning of the week.
With Ethereum's price currently trailing the broader market trend, strategic investors might perceive it as undervalued. If they choose to capitalize on the discounted ETH price by establishing new positions, ETH could potentially experience a significant breakout in August. However, investors will be keenly watching the performance of ETFs as they enter their first full month of trading.
It's worth noting that following the launch of Bitcoin ETFs in January, it wasn't until March 2024 that BTC saw its biggest price surge, driven by significant inflows into the newly introduced derivative assets. If Ethereum follows a similar pattern, a breakthrough of key resistance levels in August could be on the cards as the Fed is widely expected to cut rates in September, setting the stage for a possible breakout.
Ethereum Price Prediction: Can ETFs Prevent a Dip Below $3,000?
The daily chart shows that Ethereum's recent price action suggests that a bearish trend might persist, despite the previous surge. The price rallied significantly by 15.08% over three days, reaching a high of $3,396.01. However, this rally faced strong resistance, leading to a sharp pullback. Currently, Ethereum is trading at $3,106.58, reflecting a 3.87% decline on the trading day of August 1.
The parabolic SAR (Stop and Reverse) dots located above the price indicate a bearish trend. This suggests that the downward momentum could continue unless there is a significant reversal. Immediate resistance lies around $3,499.01, followed by a larger resistance at $3,600. Failure to break through these levels could result in further downward pressure.
On the downside, Ethereum is approaching the critical support level of $3,000. A decisive break below this level could accelerate the bearish trend, driving the price toward the next support at $2,800.
The ADX (Average Directional Index) currently stands at 20.94, suggesting a weak trend. But if the ADX crosses above 25, any rally could confirm that the bearish momentum is strengthening.
While the launch of ETHETFs at the end of July initially brought some bullish sentiment, the overall trend appears bearish unless major resistance levels are broken. Investors should closely monitor the $3,000 level, as a break below it could signal a deeper correction.
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