Last
week, Bitcoin jumped following the news that Greyscale won the lawsuit against
the SEC as the D.C. court ruled that the SEC improperly rejected the Bitcoin
spot ETF. This was seen as a positive news as Greyscale will have to reapply
for a spot ETF but that an ETF is actually coming. The news helped to lift many
cryptocurrencies like Ethereum, since Bitcoin is seen as the benchmark for the
crypto market. Ethereum started to “selling the fact” soon after though and
eventually returned to the previous lows. Looking at the bigger picture, we
have some bearish news all around as CryptoQuant reported
that Bitcoin trading volume is at its lowest in more than four years and on the
macro side we have more and more deteriorating economic data that point to a
possible recession in Q4 2023 or Q1 2024. On top of that, the central banks are
expected to keep monetary conditions tight even if we start to see more
weakness creeping in, which should ultimately make the economic conditions and
the risk sentiment worse.

Ethereum Technical Analysis
– Daily Timeframe

On the daily chart, we can see that Ethereum spiked
higher following the news of Greyscale winning the lawsuit against the SEC but
found strong sellers at the red 21 moving average and the
61.8% Fibonacci retracement level,
eventually coming back to the previous lows. The price is now consolidating but
the bias remains clearly skewed to the downside.

Ethereum Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can see that the buyers had
a chance to enter at the previous resistance turned support where
they also had confluence with the
38.2% Fibonacci retracement level, but the price just fell through it like
nothing and even broke out of the counter-trendline. This is
a bearish sign, and we should see the sellers coming into the market at every
pullback now.

Ethereum Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can see that we
have now a consolidation near the lows. Such consolidations generally lead to
big moves once the price breaks out. If the price breaks to the upside, we
should see the buyers piling in to target the 1681 resistance and
try a breakout to invalidate the bearish setup. The sellers, on the other hand,
will want to see the price breaking to the downside to pile in even more
aggressively and extend the fall into the 1400 level.

Upcoming Events

This week is a bit empty on the data front with just the
US ISM Services PMI today and the US Jobless Claims tomorrow being the main
highlights. If we see strong data, the market is unlikely to price an imminent
recession and thus it shouldn’t affect Ethereum too much. On the other hand,
weak data should bring back recessionary fears and likely trigger some risk
aversion in the markets eventually weighing on Ethereum.

This article was written by FL Contributors at www.forexlive.com.

• A slower day for major currencies as the bond selling pauses for now
• ECB’s Kazimir: The preferable option would be to hike rates by 25 bps next week
• ECB’s Knot: Markets may be underestimating September rate hike chances
• ECB’s Villeroy: We are near or very near the peak on interest rates
• ECB’s Villeroy: There is a slowdown but no recession
• BOJ’s Takata: We won’t evaluate currencies by focusing on certain levels
• BOJ’s Takata: Stronger than expected US economy having an impact on currencies
• Japan’s Matsuno says watching FX moves with high sense of urgency
• Eurozone July retail sales -0.2% vs -0.1% m/m expected
• Germany July factory orders -11.7% vs -4.0% m/m expected
• Germany August construction PMI 41.5 vs 41.0 prior
• UK August construction PMI 50.8 vs 50.5 expected

Markets:

• JPY leads, GBP lags on the day
• European equities lower; S&P 500 futures down 0.2%
• US 10-year yields down 2 bps to 4.248%
• Gold down 0.1% to $1,924.39
• WTI crude down 0.5% to $86.29
• Bitcoin up 0.2% to $25,745

The selling in Treasuries is taking a bit of a breather, at least for now, and that is helping to keep dollar gains in check in European trading today.

The greenback is slightly on the lower side but nothing too significant. USD/JPY did hit a low of 147.03 but is keeping around 147.30-40 levels now, still down 0.2% on the day.

Meanwhile, EUR/USD is up 0.2% to 1.0740 and AUD/USD up 0.2% to 0.6390 levels currently. But those are the only real movers with there being light changes among other dollar pairs, so that speaks to the lack of enthusiasm so far.

In the equities space, there is a more cautious mood though with European indices trailing and US futures also slightly softer. There is still some angst it would seem, after the jump higher in bond yields on Friday and yesterday.

In terms of headlines, we did get some added verbal intervention from Japan and also ECB policymakers trying to keep a rate hike next week as being a ‚possibility‘. But both of those developments aren’t anything new at this stage.

This article was written by Justin Low at www.forexlive.com.