Ethereum is following the general trend in the cryptocurrency market, as it sheds its profits earned over the past week. The cryptocurrency has been moving along with Bitcoin and the big cryptocurrencies, but the price of ETH is now reacting to new economic data published in the US.
At the time of writing, Ethereum is trading at $1,300 with a 2% loss and a sideways movement in the past week. Other cryptocurrencies in the top ten by market capitalization are posting a similar price movement except for XRP. This symbol shows strength against the trend and continues to generate profits over the same period.
Incoming Ethereum for another week side
Data from Indexes of Materials (MI) shows that Ethereum is seeing some bids at its current levels. This could point to a short-term rally to the previous resistance levels at $1,340, with potential at $1,400.
As shown in the chart below, Ethereum price has reacted relatively well to the recent price action with supply (buy) liquidity reaching its lowest level today. This supported the price of ETH which allowed it to rebound to the area around $1340.
Earlier today, the second cryptocurrency by market capitalization saw a spike in selling from all investors, from retail to whales. However, the sell-off has been tempered in the last hours with big players with orders reaching $100,000 to buy Ethereum price action.
These players have bought over $800 million of ETH on short time frames and may be able to hold ETH for a while. However, ETH price action could be at risk as the market approaches the weekend.
For Ethereum and Bitcoin, $1,200 and $18,500 are the key levels to prevent new arrivals to yearly lows. According to a pseudonymous trader, as long as these levels remain constant, the cryptocurrency will stay in line with more days of sideways movement. Merchant He said:
The moment he gives him $18.5K or $20.5K (for Bitcoin), we are likely to see that followed by a big move. Chop chops and more chops until then. Wednesday’s CPI may change a bit, but as we speak, we’re back in the middle of the range.
Ethereum and Bitcoin brace for incoming volatility
Regarding the latter, the September Consumer Price Index (CPI) reading and today’s data on the US economy show that macroeconomic forces remain in check. So far, economic data has been positive and has exceeded experts’ expectations.
This is a negative for Bitcoin, Ethereum, and global markets because it suggests that the US Federal Reserve (Fed) can keep up with the rally and even increase pressure to slow inflation measures. In this sense, the printing of the CPI next week could be one of the main events for ETH, BTC and the entire industry.
Speaking about the possibility of the Federal Reserve taking a less aggressive stance, directing its monetary policy, Keith Allan of Material Indicators Wrote:
The axis is unlikely to be FED without something of great importance happening. The #FED wants to see consecutive months of lower CPI and increased unemployment.