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Highlights
- ETH price may find support at the 50-day SMA around $3,400 before bouncing back up.
- Market analysts forecast no rate cuts or hikes in the upcoming FOMC meeting.
- Ethereum L1 generated 20x more fees than the top L2s combined in Year to Date (YTD).
Ethereum price broke out downward from a consolidation zone, invalidating the previous bullish flag. Meanwhile, the markets eagerly await the Federal Open Market Committee (FOMC) meeting on Wednesday to know whether interest rates will get cut or spike higher.
The price of Ethereum was $3,448 during American trading hours on Tuesday, a 6% drop in the last 24 hours and a further 9.7% decrease in 7 days, as per CoinGecko data.
ETH/USD Price Prediction: Bears Take Hold of the Market, These Are the Support Levels to Watch
ETH price was previously trending in a consolidation zone, part of a larger bull flag market structure. Bull flags are bullish, and the markets expected the pattern to resolve upwards. However, the Ethereum price experienced great downward pressure in the early morning hours of June 11.
The price of Ethereum broke below the range, invalidating the bull flag on the 4-hour timeframe. Nevertheless, on the daily timeframe, ETH price action is still trending above the 50-day and 200-day simple moving averages (SMA), albeit very close.
If bears persist, ETH price may drop further and find support at the 50-day SMA, which also coincides with the 0.5 Fibonacci retracement level. This will put the price of ETH around $3,400. Further below, key support areas exist around $3,200 and $2,900.
On the flip side, if the bulls overpower the bears, the ETH price may rally and test the lower boundary of the range around $3,650. If ETH continues to rise, it may re-enter the range and move sideways between $3,700 and $3,950 before breaking to the upside and heading towards $4,200. Currently, $3,650 is the strongest resistance level for Ethereum price action.
Why is the Ethereum Price Crashing?
The drop in Ethereum price comes a day ahead of the FOMC meeting and also coincided with Bitcoin’s drop in price. The crypto community thinks that the recent market panic is connected to the FOMC outcome.
The panic is of FOMC and PPI outcome coming on wed and thurs. My guess is we will pump back strong after FOMC and PPI numbers🙏🙏#Bitcoin #altcoins
— ₿ SatMaxx ₿ (@vinee202) June 11, 2024
Market analysts from Bankrate forecast that the FOMC will leave interest rates at a 23-year high in the upcoming meeting. However, they also estimate that there will be three or fewer rate cuts before the end of 2024.
Meanwhile, Ethereum fundamentals remain strong, as the mainnet continues to dominate in fees over Layer 2s, generating 20X more fees than the top L2s combined.
Bottom Line
Investors remain alert for Wednesday and Thursday since FOMC and PPI data may influence the next direction of Ethereum price and the general markets. Ethereum’s positive fundamentals may help sustain the price if FOMC results and comments turn out negative for the markets
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