Overview
- On Wednesday, Ethereum experienced a 1.53% decline, dropping to $1,890 after reaching a session peak of $1,926, as traders paused in anticipation of the Federal Reserve's upcoming rate decision.
- Spot ETH exchange-traded funds (ETFs) saw an inflow of $14.53 million today, marking a total of $71.17 million in net positive flows over three consecutive weeks ending July 28.
- The "death cross" formation persists, but the charts indicate an increase in trend strength.
The cryptocurrency market is currently in a state of suspension, closely monitoring the Federal Reserve's next actions.
Bitcoin remains around $64,000, while the Fear & Greed Index is positioned at 29, reflecting a significant level of fear among investors. The Federal Reserve is anticipated to maintain rates between 3.50% and 3.75%, although a hawkish comment from Fed Chair Kevin Warsh could unsettle risk assets. Stock markets are also exhibiting caution.
Ethereum, the second-largest cryptocurrency by market capitalization, began Wednesday at $1,919.80, hit a high of $1,926.10, and has since retreated to $1,890.60, marking a 1.53% decrease for the day. This decline is a minor setback following a significant recovery from the lows of 2026 earlier this month.
This rebound has been subtly bolstered by institutional investment: SosoValue reports that ETH has seen three weeks of consecutive net inflows, the best performance since April.
The death cross, characterized by the 50-day exponential moving average (EMA) falling below the 200-day EMA, remains intact, indicating a bearish structural bias. The EMAs reflect average price trends over various periods; a crossover where the shorter-term average dips below the longer one signals a continuing downward medium-term trend. Until this changes, the burden lies with bullish investors.
However, the Average Directional Index (ADX) has shifted to 23.2, with buying pressure (DI+) exceeding selling pressure (DI–). The ADX measures trend strength irrespective of direction; values above 20 suggest a significant trend may be developing. Presently, bulls are gaining the upper hand in this internal struggle, though not sufficiently to establish a definitive trend.
The Relative Strength Index (RSI) stands at 54.7, indicating neutral territory with a slight inclination towards buying interest. The RSI assesses whether an asset is overbought or oversold on a scale from 0 to 100, with readings between 40 and 60 providing no clear directional cue. The Squeeze Momentum Indicator has just emerged after a phase of compression, currently showing a momentum reading of 0.71 in the positive range—indicating a slight upward bias that requires a catalyst to gain traction.
According to the Fibonacci retracement analysis of ETH's recent movement—from a low of $1,846 to a high of $1,980—the golden zone, which indicates the highest likelihood of a market cooldown, lies between $1,897 and $1,913. The current price sits just below this zone, making it a crucial near-term pivot point: a resistance level on the ascent and a threshold bulls need to surpass to maintain the validity of the recovery narrative.
On Myriad, a prediction market by Dastan, which owns Decrypt, traders largely expect a drop to $1,500 before any rise to $3,000.
Sentiment peaked at 83% favoring a drop in mid-June when ETH was around $1,682, as reported by Decrypt. The recovery since then has reduced those odds, but with ETH still 58% below $3,000 and just 21% above $1,500, bearish sentiment prevails.
Potential for Bullish Movement
A stable Fed coupled with a softer-than-expected message from Warsh could unlock a bullish scenario. The ongoing ETF inflows are substantial and persistent. Should ETH close above $1,913 today or in the next session, it would reclaim the golden zone and target $1,944—the 23.6% Fibonacci extension.
Beyond that, $1,980 represents the upper boundary of the current Fibonacci leg and the next significant resistance point.
Reasons for a Likely Bearish Outcome
A hawkish stance from the Fed or any indication of a rate hike could push ETH back to test the support range of $1,874–$1,846. The death cross is unlikely to reverse soon, with the 200-day EMA positioned near $2,174, significantly above the current price. The ADX of 23.2 has yet to break the 25 threshold needed to affirm a genuine trend, but with the Fed's decisions being unpredictable, the direction remains uncertain.
Most of the chart indicators still suggest a downward trend until ETH convincingly surpasses $1,980.
Disclaimer
The opinions expressed in this article are solely for informational purposes and do not constitute financial, investment, or other advice.