Ethereum Price Decreases Amid Mixed Factors
As traders evaluate the Federal Reserve’s bullish outlook for the rest of 2023, the Ethereum price has taken a hit. A combination of fundamental elements and technical indicators has caused Ethereum’s native token Ether ETH $1,664 to experience a nearly 7% dip today.
Federal Reserve’s Bullish Outlook Impacting Ethereum Price
On June 15, Ether’s price fell by 1.7% to about $1,620, marking its lowest level in three months. The intraday decline of ETH price, part of a more extensive weekly downward trend, has been accelerated by the Federal Reserve’s bullish attitude from a day prior.
The U.S. central bank maintained the base interest rates due to a slowing inflation rate. However, its chairman, Jerome Powell, announced that they would increase rates more than investors anticipated in 2023, until there’s a substantial and noticeable drop in consumer prices. Since Powell’s statement, ETH’s price has seen a decline of roughly 7.5%.
Historically, Ether has demonstrated riskier asset behavior, displaying a strong positive correlation with U.S. stock indexes. This trend continued on June 14 and 15, with the Ethereum token dipping in sync with the S&P 500, the Nasdaq Composite, and the Dow Jones.
The recent 24-hour decrease in Ether’s price has also initiated a wave of leveraged long liquidations amounting to $54.95 million on June 15, the highest among top-ranking crypto assets, as reported by Coinglass.
Ether Price Slips Below Critical Support
Ether’s sale-off on May 15 was exacerbated by the loss of key support metrics, including multi-month ascending and horizontal trendlines and a 200-day exponential moving average (200-day EMA; the blue wave) around $1,750.
Nonetheless, there’s potential for ETH/USD to recoup some of its recent losses this month, given that its daily relative strength index (RSI) has dropped below 30 – an “oversold” area that typically precedes a rebound or consolidation.
Longer-term charts also suggest a possible recovery. Interestingly, the ETH/USD pair continues to float above its 200-week EMA (the blue wave) near $1,600 — a psychological support level since March 2023.
Should the price decisively rebound from the lower trendline, Ether’s chances of ascending toward the flag’s upper trendline near $1,850 would be high — representing a roughly 15% increase from current levels.
In the event of a break above the flag’s upper trendline, ETH could reach a new target price of $2,500 in 2023.
However, the flip side points to a bearish scenario, with a potential drop below the flag’s lower trendline that could further drag down ETH’s price, especially toward the Q1 support range of $1,400-1,450.