Ethereum falls further after Fed's Waller hints at larger rate hike, hot CPI

Ethereum faced selling pressure yesterday after Federal Reserve Governor Christopher Waller delivered unexpectedly hawkish comments during a speech on the economic outlook.

Waller indicated that a December rate increase would still be justified irrespective of the inflation figures released that day. He noted that the data would only affect the size of the move. Specifically, a month-over-month core CPI print of 0.3% or above would prompt him to support a bigger 50-basis-point hike.

The speech triggered a hawkish market repricing, boosting Treasury yields and the US dollar. That dampened risk appetite, pulling Ethereum lower.

The core CPI subsequently matched the 0.3% threshold, pushing yields and the dollar further up amid rising bets for a larger rate increase.

On the US-Iran diplomatic track, there has been no progress. Qatar stated yesterday that it has gained a minimum of two weeks for talks, but stressed that substantial disagreements still exist. That implies that markets might need to adjust expectations of a quick agreement, which could trigger an oil price recovery and further sour risk sentiment.

Currently, the macroeconomic environment stays bearish for Ethereum unless a tangible advance occurs in US-Iran talks or the Fed adopts a more accommodative stance.

ETHEREUM TECHNICAL ANALYSIS – DAILY TIMEFRAME

Ethereum extended its losses yesterday, with the price gradually nearing the critical 1,900 level. Should it reach that point, buyers are expected to intervene, with a clear risk defined below that level, aiming for a recovery toward 3,400, with the descending trendline as an initial objective. Sellers, conversely, would prefer a breakdown below 1,900 to ramp up bearish positions targeting the 1,500 level.

ETHEREUM TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

On the 4 hour timeframe, a descending trendline outlines the bearish bias. Any pullback may see sellers use the trendline as resistance, with risk defined above it, maintaining a focus on the 1,900 target. Buyers, meanwhile, would need a breakout above the trendline to prolong the rebound toward the larger descending trendline.

ETHEREUM TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

On the 1 hour timeframe, little additional insight is available. Sellers appear to have a more favorable risk-reward near the trendline, while buyers require a breakout to enable further upside.

UPCOMING CATALYSTS

The upcoming release of US jobless claims is scheduled for Thursday, followed by US PPI data on Friday.