Crypto Market Shakes, Fed Rate Cut Expectations Rise, Where Does Ethereum Go From Here?Financial markets exhibited volatility on Wednesday. The US core CPI for July decreased for the fourth consecutive month, hitting its lowest growth rate since early 2021
Crypto Market Shakes, Fed Rate Cut Expectations Rise, Where Does Ethereum Go From Here?
Financial markets exhibited volatility on Wednesday. The US core CPI for July decreased for the fourth consecutive month, hitting its lowest growth rate since early 2021. This could further point towards a 25 basis point interest rate cut by the Fed in September. As US stocks closed, the S&P and Dow Jones indices rose 0.38% and 0.61% respectively, while the Nasdaq remained flat.
However, despite the positive performance of US stocks, the crypto market struggled. On-chain data indicated that the US government transferred 10,000 Bitcoin related to Silk Road to CoinbasePrime around midday Wednesday, seemingly sparking market anxieties about another large-scale sell-off. At the time of writing, Bitcoin has fallen below $59,100, registering a near 3% decline in the past 24 hours. Currently, the total crypto market capitalization stands at $2.09 trillion with Bitcoin's market dominance at 55.8%.
SecureDigitalMarkets analysts state, "Given Bitcoin's position below the 20-day, 50-day, and 200-day moving averages, bears are focused on further declines, targeting $57,500. If this level is breached, we may witness a downward pressure point at $55,000."
ETHUSDT.P Review and Short-Term Strategy
Chart Analysis
1. Overall Trend: Ethereum (ETH) is currently trading at 2,663.07 USDT. The charts reveal that ETH has witnessed a recent dip followed by a gradual rebound. However, it encountered resistance near the upper resistance level, resulting in some price fluctuations.
2. Key Levels:
- Support Levels: The current primary support zone lies between 2,625.45 USDT and 2,613.30 USDT. This area offered significant support during price drops, enabling price rebound.
- Resistance Levels: The primary resistance zone above lies between 2,718.44 USDT and 2,788.88 USDT. This zone repeatedly stifled further price gains, forming a strong resistance. Another lower resistance lies near 2,684.53 USDT, to which the market reacts sensitively.
3. Structural Analysis:
- The chart structure indicates a rapid rebound of ETH after a decline, reaching the upper resistance zone and facing resistance. The price exhibits clear signs of stagnation in this zone, suggesting weakening bullish momentum.
- Simultaneously, the lower support area provided strong defense, causing price rebound upon reaching this area, forming a clear support effect in the short term.
Risk Management Measures
- Bullish Risk Control: When executing a bullish strategy, if the price falls below the support zone of 2,619.66 USDT, bulls should promptly exit their positions to avoid potential further downside risks.
- Bearish Risk Control: When executing a bearish strategy, if the price breaks through and stabilizes above 2,718.44 USDT, bears should exit their positions promptly to avoid losses caused by market reversals.
Summary
Ethereum currently sits between crucial resistance and support levels, suggesting possible continued price consolidation within these zones in the near term. Short-term traders should closely monitor price movements at these key levels and incorporate market momentum and volume changes into their trading strategies. Moreover, strict risk management is crucial for mitigating market uncertainties.
The following supplements the article content to aid reader comprehension:
- Impact of US CPI Data: The Fed closely monitors inflation data to determine monetary policy direction. The consecutive decline in core CPI indicates easing inflationary pressures, increasing the likelihood of a Fed rate cut.
- Sell-off Pressure on Bitcoin: The US government's transfer of Silk Road-related Bitcoin to CoinbasePrime sparked fears of a significant sell-off. This could be a major contributing factor to Bitcoin's price drop.
- Ethereum's Volatile Market: Ethereum's price fluctuates between critical resistance and support levels. This implies potential continued price consolidation in the short term, requiring cautious trading from investors.
- Significance of Risk Control: In cryptocurrency market investing, risk management is paramount. Investors should formulate reasonable trading strategies based on their risk tolerance, set stop-loss points, and avoid substantial losses.
It is essential to note that the above analysis is solely for reference purposes and does not constitute investment advice. Investors should make independent judgments based on their circumstances and assume full responsibility for investment risks.
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