Ethereum Churns Between Support and Resistance Ahead of CPI Data

FUNDAMENTAL OVERVIEW

Ethereum, like bitcoin, saw volatility in the final days of last week. A Thursday rally occurred following dovish remarks from Fed’s Waller, who indicated a willingness to hold rates steady in September unless CPI data comes in hot. His departure from a typically hawkish tone prompted a dovish repricing of rate expectations, reducing the likelihood of a September hike and lifting Ethereum.

Most of those gains were reversed Friday when US non-farm payrolls beat expectations, with August job growth nearly triple the 56,000 consensus. That shift repriced hawkishly, pushing September rate-hike probabilities back to where they stood before Waller's comments.

Attention this week turns to the US CPI release. Without an unexpected development in US-Iran relations, price action is expected to stay largely rangebound or slightly negative, with traders potentially hedging ahead of the data.

If CPI comes in soft or in line, Ethereum could get a lift, since Waller said he would not consider a rate hike without a hot reading. Conversely, an upside surprise in core monthly inflation would likely spark another selloff as traders brace for a rate increase.

ETHEREUM TECHNICAL ANALYSIS – DAILY TIMEFRAME

Ethereum remains confined between support at 2,360 and resistance at 2,560. A breakdown would likely attract sellers, targeting a drop toward the major trendline near 2,100. Buyers, meanwhile, aim for a break above resistance to push toward the 3,400 level.

ETHEREUM TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

The rangebound price action is evident on the four-hour timeframe. Four major catalysts have driven volatility in recent weeks. Ahead of US CPI, participants are expected to continue buying at support and selling at resistance until a breakout occurs.

ETHEREUM TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

On the hourly timeframe, the choppy action inside the range is less significant than a potential breakout. The current themes are the US-Iran conflict and shifting Fed rate-hike expectations. Accordingly, traders may prefer to wait for US CPI, a surprise in US-Iran relations, or a technical breakout to determine the next move.

UPCOMING CATALYSTS

Tomorrow, the US PPI report and US Jobless Claims figures are due. The week concludes on Friday with the US CPI report.