Ethereum Stays in Range on Macro Headwinds; Focus on US-Iran

FUNDAMENTAL OVERVIEW

For more than a week, Ethereum has remained confined within a trading range, with adverse macroeconomic factors limiting any upward momentum.

On September 28, the Ethereum Foundation revealed that the first public test of the Glamsterdam upgrade on the Sepolia testnet is set for October 6. This upgrade is significant for Ethereum as it aims to enhance the network's capacity and scalability. Greater capacity may eventually boost network usage and demand for Ethereum blockspace, potentially generating higher economic value.

On the macroeconomic front, the United States and Iran continue talks to modify Iran’s latest proposal, which would reopen the Strait of Hormuz within seven days subject to specific conditions. Reports indicate that the dispute now focuses on the order of actions rather than the plan's content.

Yesterday, Iran's government spokesperson stated that Foreign Minister Araghchi presented "a US proposal" to the cabinet, but provided no additional details. Consequently, traders are monitoring headlines closely for further updates.

Fed’s Williams offered some backing to the crypto market, stating that he saw no urgency following the September rate hike and that one additional increase was probable if the economy met expectations. His remarks led to a dovish repricing, with the probability of a rate hike in October dropping from 70% to 45%.

Yesterday, the US Core PCE data came in below expectations, further reducing the odds of an October rate hike. However, it is worth noting that the downside surprise was largely attributed to the BEA's annual methodological update and revisions.

The BEA altered the way certain prices are computed. Prior to the release, economists had cautioned that the revisions might significantly reduce reported core PCE due to the uncertainty surrounding these changes. Overall, the data did not represent a fundamental shift.

Going forward, attention will stay on US-Iran developments. A resolution would be favorable for Ethereum, as aggressive expectations for Fed rate hikes would probably be scaled back. Conversely, an unfavorable outcome or extended deadlock would likely continue to suppress risk sentiment and the crypto market.

ETHEREUM TECHNICAL ANALYSIS – DAILY TIMEFRAME

Ethereum continues to consolidate near the key upward trendline. Buyers are likely to support the trendline, placing a stop below it, and aim for a rise to the 3,000 mark. Sellers, meanwhile, are looking for a break below the trendline to initiate a decline toward 2,360.

ETHEREUM TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

A resistance zone near 2,740 has seen multiple price rejections in recent days. Sellers are expected to continue entering near this resistance, with a stop above it, aiming for a drop below the main trendline. Buyers are waiting for a breakout above resistance to join and target a move to 3,000.

ETHEREUM TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

On the hourly timeframe, sellers have a more favorable risk-to-reward scenario near resistance and upon a trendline breakdown, while buyers anticipate a rejection at the trendline or a resistance breakout to set up for fresh highs.

UPCOMING CATALYSTS

Today sees the release of the US ISM Manufacturing PMI and the latest weekly jobless claims. The week closes tomorrow with the US nonfarm payrolls report. However, attention will remain on US-Iran negotiations.