A troubled start to the year 2023 for the prince of cryptocurrencies? – 2022 will not go down in the annals of Ethereum (ETH) history. In fact, its second bearish run in history, which is still ongoing, has caused its market capitalization to plummet by three quarters since its last ATH in November 2021. To the point where it has left its mark on many cryptocurrency investors. Now, 2023 starts in a complex market environment with many big uncertainties like inflation, prospect of a recession, geopolitical conflict between Russia and Ukraine, etc.
In this sense, the price of Ethereum has struggled to trigger a clear trend in recent weeks. And while I digest the failure of FTX relative to other altcoins rather well, we are not immune to it a threat of a new wave of correction in its bear market. Especially since the FED has indicated that its monetary tightening will continue. And this will have to be contextualized with a restrictive fiscal policy in the United States accompanied by a minimum tax of 15% for large companies and a 1% excise tax on share buybacks.
Despite these headwinds, will the prince of cryptocurrencies stand out positively? Or stay in the trend of an extremely sluggish 2022? This is what we will see in the latest technical analysis.
Ethereum in monthly units – A complicated end of the year
The last quarter of 2022, which started well, ended badly. Because precisely, the price of Ethereum is struggling to move away from 1200 dollars. This explains the sudden drop in Tenkan. At the same time, he is perilously approaching a position under the cloud of Ichimoku, also known as Kumo. As for the Chikou Span which will probably remain above the Kumo in the coming months, it could end up below the price of the prince of cryptocurrencies.
Upon closer inspection, holding or below $1200 would not be the chart-topping turning point that investors have been waiting for. Frankly, it is quite symbolic due to its proximity to ATH 2018. Therefore, investors should pay attention to the $1000 support. And if the bears manage to take over permanently in the coming months, not only that the prince of cryptocurrencies would return to a quotation of three units. But the possibility of a third wave of correction would spell a fatal defeat for the bulls.
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Ethereum in Weekly Units – Worrying Price Stall and Chikou Span Below the Kumo
I’ve been thinking about you for months an Ethereum price and a Chikou Span below the Kumo in weekly units. The support of $1200, despite the failure of FTX, does not cancel these signals which unfortunately cause the current bearish strength to run. And on the other hand, the prince of cryptocurrencies has not crossed the Kijun since his passage under the cloud in May 2022 with various subsequent failures under the $1,700 resistance.
That’s why the bounces we’ve seen earlier have been just a breath of fresh air for the ailing bulls. And as I write, I am afraid that crossing the descending line laterally does not send a reassuring message about the future course. Especially since the evolution of the future Kumo would appear like a ball and chain making it difficult to build the foundations for a lasting rebound.
In case the bulls concede the $1200, the threat below $1000 could quickly become clearer if the market environment is chaotic. Worse, ETH and Chikou Span would bog down under the Kumo for quite some time. Conversely, we would start with yet another technical rebound towards $1400 or $1700 in the absence of catalysts that would worry the bears.
Ethereum in daily units – Prices very close to Kumo but without real conviction to buy
In daily units, Ethereum is playing on investors’ nerves around $1,200 and as it approaches the lower bound of the Kumo, the Senkou Span A (SSA). Starting with this withstat, the short-term trend is neutral without interrupting the race to the down. With a Chikou Span that pales under the courses, the Kumo and the downline respectively.
In the event of a rebound, the $1400 resistance near the upper bound of the Kumo, the Senkou Span B (SSB), would not be an easy target to tame. However, if successful, we would pave the way towards $1700 in the hope that the prince of cryptocurrencies closes its spread against Kumo in weekly units. And maybe we would then have a first breakthrough to be exploited to accumulate cheap purchases.
In reverse, breaking $1200 would involve retesting last year’s lows. If so, all signs could turn red if the start of the year 2023 turns sour.
In summary, there is still nothing to feed on any buying interest in the chart prince of cryptocurrencies. Not only that, it’s always raining resistance. But the developments of the Ichimoku Kinko Hyo in both weekly and daily units would not justify any neutralization or reversal of the current trend.
In view of an extension of the race to the bottom, it would be appropriate to examine the extent of the new wave of correction. With the fear that we will go back to talking about cryptocurrencies in the bad sense of the term. Below $1000, we could potentially enter the red alert zone on Ethereum. And why not converge on the 2018 Bear Run standards?
Finally, fundamentally, cryptocurrencies remain confused by the lack of liquidity of central banks linked in particular to the monetary tightening of the FED. Without restarting this engine, it must be admitted that a return of the Altseason would prove illusory as long as inflation in the United States does not contract significantly.
But let’s assume that central bank liquidity is no longer on the agenda during the 2020s. Then we may face some hard consolidation of the cryptocurrency sector before we see a new bull run emerge. To do so, investors, whether bullish or bearish, would have to follow the course of the Fed’s monetary policy. And the least we can say at the moment is that soaring bond rates could point to a new monetary paradigm with different equations for all risky asset classes.
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