Ethereum (ETH) Struggles at $2,800Will Bulls or Bears Win?
Key Takeaways
- Ethereum struggles with a massive falling wedge, holding key support at $2,800.
- Analysts see potential buying opportunities at $2,900 but warn of risks below $2,700.
- Macro factors, including the Feds stance on QE, could impact ETHs future trajectory.
Ethereums price action remains a focal point for traders as it grapples with a massive falling wedge. Crypto trader Daan Crypto Trades highlighted that ETH failed to break this critical resistance once again but managed to hold its ground near the Daily 200MA/EMA.
The structure remains intact as long as the asset doesnt pull below $2,800. He thus warned of price movement below this level, suggesting that waiting for a confirmed breakout was perhaps safer.
Another voice in the discussion, Ali, pointed to the head-and-shoulders pattern overcrowding on ETHs chart. He said if the pattern holds, any dip toward $2,900 could be a buying opportunity, adding that strict stop-losses should be placed between $2,700 and $2,500 to mitigate downside risks.
Fed Policy and Market Sentiment
Adding to Ethereums uncertainty, Benjamin Cowen discussed the broader macroeconomic environment. He speculated that ETH might see further downside pressure if the Federal Reserve does not relent on QE this week.
He also, however, mentioned that there was a possible reversal scenario in March 2025 when the Fed would be compelled to change its stance, after which Ethereum and, consequently, the ETH/BTC pair could recover very sharply.
He also outlined historical patterns, showing that Ethereums capitulation events took place in April and August, which coincided with rate hikes by the BOJ. He suggested that, given the BOJ just hiked rates again, another ETH bottom might happen in February or March.
On several occasions over the past few years, Ethereum has failed to stay above $4,000, and traders remain unconvinced that will change anytime soon.
Ethereum Traders Await a Breakout or Breakdown
Against all these mixed signals, Ethereums setup suggests that it could soon break higher or lower. ETH breaking higher above the falling wedge pattern opens C to more bullish momentum, while any slip and failure to hold above $2,800 could suggest a further correction toward key support areas, as analysts have suggested:.
With full-blown macro forces at play and traders keeping a close watch on ETHs reaction to key levels, the next few weeks could mark a defining phase in Ethereums journey. How it shapes up-whether a strong rebound or further downturn-would, to a large extent, depend on the way the market responds to external factors like the line of action the Fed will pursue.
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