After U.S. inflation hit its highest level in 41 years, Ethereum and the overall crypto market took a bearish turn, with investors bracing for further rate hikes this year. As seen on Coinbase charts earlier today, Ethereum (ETH), the second-largest cryptocurrency by market capitalization, fell to an intraday low of $1,499.79, the lowest level since March 2021. ETH is now down nearly 67% from its all-time high of $4,878. ETH/USD might experience a downside rejection as bulls become defensive to test bids at the $1,500 key support. Ethereum’s proof of stake transition might be delayed. On Friday, developers decided to postpone the difficulty bomb after discussing several flaws they identified when testing the software for the Merge on Ropsten, one of the network’s oldest testnets. Although developers haven’t set a specific date for the merge, Ethereum co-founder Vitalik Buterin has stated that it might happen as soon as August if no major concerns arise.
Key Levels
Resistance Levels: $2,300, $2,000, $1,700
Support Levels: $1,500, $1,300, $1,000
ETH/USD Daily ChartThe daily chart of the ETH/USD pair shows that the risk remains to the downside, as the pair continues to grow beneath a mildly bearish moving average (MA 50), while technical indicators continue to trend south at negative levels.
The growth continues to be negative, as evidenced by the relative strength index (RSI). The continued breach of the confluence zone at the $1,700 level might contribute to medium-long-term bearishness for a new bottom beneath $1,500, reopening the downward trend from the $3,581 April 2022 (high) level.
ETH/USD 4-Hour ChartTechnical indicators are bearish, as seen on the 4-hour chart. The relative strength index (RSI) entered the negative region with strong bearish slopes on the 4-hour chart, as the pair fell beneath both the moving averages of 5 and 13, after lingering much of the week beneath the horizontal resistance level at $2,000.
The initial bias for a $1,500 low-level retest remains active on the downward path. On the plus side, a small resistance level at $1,700 could limit a rebound. As a result, the risk of another drop in the negative may exist. However, if the resistance at $1,700 is broken, a further rebound is predicted.
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