Concerns about the next recession will continue to weigh on risk sentiment and, as a result, on overall crypto prices. Since mid-August, when it failed to break through the $2,000 mark, ETH has been declining. Although Ethereum’s decline has accelerated since the Merge was successfully completed two weeks ago, it has been trading sideways in the last few daily sessions. ETH/USD appears to be in a holding pattern, awaiting developments that could provide new directional impetus. However, a break above or below its tight range will almost certainly be followed by a significant move in the same direction. At the time of writing, the No. 2 crypto is trading in the $1,300 range, and a move on either side could signal the end of the current consolidation. The long-awaited Ethereum (ETH) merge finally occurred on September 15, 2022, after months of speculation. As a result of the merge, the popular blockchain network switched from its hardware-based PoW (proof-of-work) model to the more environmentally friendly PoS (proof-of-stake) model. Following the upgrade, Ethereum announced plans for sharding and purging, which will reduce the total ETH supply over time, making the ETH more profitable for long-term holders.
Key Levels
Resistance Levels: $2,000, $1,700, $1,500
Support Levels: $1,200, $1,000, $800
ETH/USD Daily ChartAt the start of the new week, the ETH/USD pair returned above the $1,300 handle after a probe below failed to sustain a break lower. However, the rally was capped at the intraday high of $1,318. Studies on the daily chart are still mixed and lack clearer direction signals, which could lead to prolonged consolidation.
The downside is expected to persist as the pullback from the $1,253 prior-week low does not appear to be complete. Increased downside pressure could be expected if the weekly low is violated, exposing a cluster of supports, including the yearly low of $879. Price will generate a stronger bullish signal for a new recovery if it bounces above.
The indicators on the 4-hour chart currently show that the negative forces are waning but still have the upper hand. In particular, the relative strength index (RSI) in recovery moves toward its midpoint while in negative territory, displaying a bullish cross above the oversold area.
If buying interest increases, the ETH/USD could gain some ground, cross the moving average (MA 50), and test $1,500, the upper limit of its recent rangebound pattern. If the price breaks through this barrier, it may rise to the recent high of $1,800 before focusing on the trend reversal point of $2,000.
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