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The world’s second largest cryptocurrency, Ethereum, is barely holding above water amid a tricky market situation. Investors are patiently awaiting the Federal Reserve’s decision on interest rates.
Some experts believe that the expected 0.25% rise in interest rates has been priced in, with the price of Ethereum and other cryptocurrencies expected to remain unchanged.
At the moment, Ethereum price is hovering at $1,575 while bulls focus on managing resistance at $1,600. On the other hand, the support at $1,520 must be defended at all costs to avoid possible declines to $1,445 and $1,400, respectively.
Over $7 billion in trading volume was recorded in the last 24 hours, although ETH price only changed by +0.15%. The sell-off in the market since the weekend caused the token’s market cap to drop from $202 billion on Jan. 29 to $192 billion.
Ethereum Price Shows Stability Ahead of FOMC
The largest smart contracts token remains relatively stable despite falling from January’s high at around $1,678. Investors retreated to the sidelines, awaiting the Fed’s decision on a likely 25 basis point interest rate hike. The first US FOMC meeting ending later today would hold New Year’s crypto bulls steady, stifle the recovery, or culminate in a near-term selloff.
According to analysis by Lookonchain on the reaction of ETH after eight FOMC meetings in 2022, investors can expect the price of Ethereum to jump up to 4.25%, with 0.25% being the lowest expected change.
Ethereum price sits comfortably above the critical support provided by the 200-day exponential moving average (EMA) (in purple) at $1,517. However, the Moving Average Convergence Divergence (MACD) indicator recently showed a sell signal, hinting at a longer trend correction in the coming days.
Traders should follow the position of the MACD line in blue as it creates divergence below the signal line in red. The declines may intensify if the momentum indicator falls to the middle line and possibly revisits the negative region. Red histograms in the same indicator reinforce increasing bearish advances.
Ethereum Price Bullish Outlook Assessment – Brief Analysis
The Money Flow Index (MFI) on the same daily chart reveals that investors are ready to pump money into Ethereum markets. We can see the IMF bouncing off the midline in the neutral zone after a major drop from the upper range of the overbought region. As long as the inbound volume is greater than the total outflow of Ether, a rebound in the trend would be the most likely outcome.
Additionally, thanks to the support provided by the 200-day EMA, the 50-day EMA (in red) has recently moved above the 100-day EMA. Although this is not a golden cross pattern, which forms with the 50-day EMA moving above the 200-day EMA, it does imply that the bulls are holding the reins and that the price of Ethereum will likely continue to climb.
The short-term analysis based on the four-hour chart shows Ethereum holding between the 100-day EMA (in blue) and the 50-day EMA (in red) on the upside. While the most popular smart contracts token is trading below the dotted trendline, its support at the 100-day EMA has been reinforced by the lower rising trendline, meaning that odds always favor a bullish outcome.
After falling from the January highs, Ethereum sank into oversold conditions based on the Stochastic Oscillator. However, the recovery is already underway with upward pressure gradually intensifying.
Therefore, with a slight push above the 50-day EMA and the dotted rising trendline, Ethereum price would resume its upward trend, targeting $1,800 and $2,000 respectively. . The MFI indicator confirms the positive picture, as seen in the daily timeframe analysis.
It would be prudent to assess the possibility of an extended trend correction, particularly if the support at the 100-day EMA on the four-hour chart weakens. From there, Ethereum will be forced to look to the 200-day EMA (purple) at $1,486 for support. If the surge materializes, the bears could retest buyers’ next congestion zone at $1,400.
Can this upgrade stabilize Ethereum’s upward price trend?
The Ethereum Merge upgrade set the ball rolling for many long-awaited features on the Proof-of-Stake (Pos) blockchain, including Zhejiang – the staking testnet that went live today. Users will interact for the first time with the new staking protocol that allows the withdrawal of staked ETH.
According to the testnet developer, the Shanghai+Capella upgrade will be triggered in about six days from today. The testnet will allow developers to monitor the withdrawal process and other related services and troubleshoot any potential issues that may arise.
The Ethereum community is eagerly awaiting the launch of the Shanghai upgrade, schooled before the end of the first quarter of 2023. This will be a notable hard fork as it will see, for the first time, investors withdrawing from the chain-locked ETH Beacons.
Experts believe the event will be an important catalyst for Ethereum prices and liquid staking platforms that allow investors to lock digital assets into smart contracts while allowing them access to their liquidity, such as LidoDAO .
The Shanghai upgrade will also open up opportunities for organizations and crypto exchanges that can use the staking feature to generate more revenue. A recent report from JP Morgan said companies like Coinbase could unlock a $500 million annual revenue opportunity with the launch of the Shanghai Upgrade.
Overall, Zhejiang will mark a new beginning for the Ethereum ecosystem and trigger a possible rise in the price of ETH. The Shanghai upgrade could also trigger a price spike in liquid staking platforms like LidoDAO.
Ethereum alternatives to buy today
Investors eager to buy Ethereum may want to consider other high-potential crypto projects alongside ETH.
We’ve reviewed the top 15 cryptocurrencies for 2023, as analyzed by the CryptoNews Industry Discussion Team.
The list is updated weekly with new altcoins and ICO projects.
Disclaimer: The Industry Talk section features information from crypto industry players and is not part of the editorial content of Cryptonews.com.
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