Ethereum saw an increase in its price on Tuesday along with the rest of the crypto market following the positive CPI data release. The jump in price saw Ethereum finally beat the $1,300 price point after hovering around $1,200 coming out of the weekend. However, the digital asset had met significant resistance at the $1,350 price level, which could end up being a bearish development for the cryptocurrency.
Ethereum Trades Are Wary
Currently, Ethereum traders are still very on edge regarding the cryptocurrency. Even the Tuesday recovery has not done much to actually instill faith in buyers, especially given the Fed’s announcement that is expected to happen on Wednesday. Expectations remain narrow because even though inflation saw a slowdown, it still remains high at 7.1%.
Given this, traders are still being conservative in their positions and are not placing too much emphasis on ETH at this time. This is expected to continue through much of the midweek trading day until Powell’s announcement is live.
There are also expectations to follow depending on what stance the Fed takes this time around. Over the last couple of months, the Fed had been hawkish due to the rising inflation in the country. But given that inflation had actually come out lower this time around, it could see the Fed soften its stance. If not, then a continuous hawkish stance from the Fed would no doubt see a retracement in the crypto market, which could see Ethereum lose all of its gains from Tuesday.
ETH’s price trends to the downside on the daily chart. Source: ETHUSDT Tradingview
Binance FUD Affects ETH
Over the last couple of days, the Binance crypto exchange had been the target to crypto users’ ire as questions about its reserves were raised. As a result, there was massive withdrawals from the exchange, with Binance Ethereum withdrawals accounting for the majority of ETH withdrawals from centralized exchanges over the past week.
As it is now, there are still rumors that the exchange may be insolvent and some are beginning to prepare for another FTX-level event if Binance were to fall. Naturally, this has led to caution among investors who expect a downtrend if such a thing were to happen.
Alternatively, the withdrawals from centralized exchanges could also point towards accumulation among ETH holders. The reduced volume on centralized exchanges could mean a bottom for the digital asset, and if the Fed announcement turns out to be positive, ETH is likely to see $1,400 before the close of day.
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Author: Best Owie