- Ethereum price is set to jump into zombie mode before the main event this afternoon.
- ETH price will be thrown left and right during and after the publication of the Powell speech.
- Once the dust settles, expect ETH price to tank and fall back to $1,423 in the coming days.
Ethereum (ETH) price is set to enter a rare moment of silence as liquidity thins towards 16:00 CET, and traders await the comments from Fed chair Jerome Powell at one of the most important central bank events of this year. Financial markets are expected to see violent and choppy price action but once the dust settles, the aftermath is likely to show that the Fed will not blink, and will continue hiking and tightening further, which means bad news for cryptocurrencies. This is specifically the case for Ethereum, which will likely eye a drop to $1,243 constituting a 25% price decline.
ETH price is set to drop 25% either this evening or next week
Ethereum price will be hard to trade as an independent cryptocurrency but rather will need to be approached as part of a broad asset class of cryptocurrencies in general, and in tandem with equities. Expect equities to be the front runner and create either headwinds or tailwinds for cryptocurrencies – and at such a sheer speed that it will almost be impossible to jump in and take advantage of the opportunity. Do not try and chase the move, rather, look for levels to go either short or long – depending on your view – although it must be underlined that the bottom line will be a bearish result once the dust settles.
ETH price could potentially spike towards $1,928 or even $2,000 on the initial words and phrases that may prove supportive to markets. Once the tone is set, the future guidance could be proven to be bearish as Powell will say that current market conditions are not yet where they need to be to push inflation back to 2% substantially, and more needs to be done with higher rates on the docket. Once the word is out, expect an immediate collapse to $1,500 with a small pause between the 55-day Simple Moving Average and the monthly pivot before dropping substantially to $1,243, which should catch price action like a falling knife.
ETH/USD Daily chart
An upside surprise is not in the forecast but could still present itself if Powell mentions that most of the work is done. That would be a massive support for equities and lead to a probable rally of over 5% to 6%, creating a massive flood of investors rich in cash and wanting to buy every risk asset in sight. This is good news for cryptocurrencies, and Ethereum price could pop towards $2,000 in just a matter of minutes and even above $2,200. With that move, the 200-day SMA will be up for grabs and, if surpassed, possibly signal an end to the downtrend that has been keeping cryptocurrencies in a stranglehold for most of 2022.