Since the beginning of the year, the number 2 cryptocurrency has risen by about 31 percent. In doing so, it is doing almost the same as the leading currency, which has gained more than 38 percent in value this month. Where else can ETH lead this year?
Ethereum price rises above USD 1,600
As the digital currency of the largest smart contract platform, the value of Ether has been steadily increasing since the beginning of the year. Although the price has fallen back a bit since then, the ETH/USD pair recently rose above the $1,600 mark. Some analysts expect the recovery to continue. The meeting of the Federal Open Market Committee (FOMC) and the upcoming decision on further rate hikes by the Fed could provide corresponding signals.
From the technical analysis, it can be concluded that there is a possibility of an intermediate phase where Ether gives way first before the value resumes the upward trend again. There is also support at $1,500, which is likely strong enough to ease increased selling pressure.
That’s the way. Can’t stop won’t stop. $ETH grow stuck 🔥🔥🔥 #Ethereum pic.twitter.com/yyFTgh3ewl
— StakingRewards (@StakingRewards) February 1, 2023
The rate of ETH is currently trading at 1,575 US dollars so it is 1.15 percent up on a weekly basis. Individual traders see a phase in the current fifth calendar week in which to “buckle up”. However, as experienced observers know all too well, this can mean a rollercoaster ride with steep climbs and steep descents.
What are the best conditions for an ETH breakout in 2023?
macroeconomic perspective
As previously mentioned, investors traditionally await the decision of the Federal Reserve Bank with great anticipation. The question that will be answered by the first central bank decision this year is crucial for the further development of Bitcoin, Ether and Altcoins as a whole. In the world of traditional finance, there is already talk of a possible increase in the main interest rate by “only” 25 basis points, which, measured against interest rate increases in 2022, is like a step on the gas pedal. According to their own statements, the central bankers want to curb inflation, but they do not want to stifle the economy unduly.
The question of how the global economy, monetary and fiscal policy and stock markets correlate with the prices of ETH & Co. However, many are convinced that speculative values like cryptocurrencies will eventually become more attractive again when interest rates fall. And a moderate rise in interest rates can be understood as the first weak sign in this direction.
This more positive sentiment compared to last year’s harvest could be due to the general reduction in inflation to 6.5% in December. In addition there are additional reports such as the expected growth in the German economy in 2023, which could not be expected in light of energy price inflation and supply chain problems.
Technical Analysis
On the technical side, there is resistance at $1,680 which has kept ETH price from breaking out significantly until now. The preliminary support at USD 1,600 has already been broken. Ether price may drop as low as USD 1,500 initially before resuming the upward trend.
On the daily chart, the 200-day exponential moving average (EMA) is showing support at $1,587. It is also worth noting that the price is about halfway to the breakout target of 46.55 percent. After such a big move up to $1,947, a reset would be expected, but with the 200-day EMA acting as support.
It looks like the rally from this support level can be resumed and a shortcut through the bulls will take the $1,600 level. Support could encourage investors to keep the uptrend active and allow them to run up to the aforementioned $1,947 followed by gains of over $2,000.
The forecasts based on the mentioned bullish signals are closely linked to the upcoming interest rate decision by the US Federal Reserve. Furthermore, the break above USD 2,000 must first succeed in order to confirm ETH’s uptrend as a long-term move. However, investors should not rule out price declines to the 1,500 and 1,400 USD levels, the 100-day EMA, for now.
How realistic is breaking out over $10,000?
Achieving Ethereum prices of 10,000 USD is a difficult task given the economic, political and internal realities of the crypto market in 2023. It looks like the coin will approach its all-time high of $4,891.70. A prerequisite for this is that the bulls push for a further recovery above USD 2,000 in the coming days or weeks.
The bullish forecast will only hold if the $1,500 mark holds after the rate decision. The decision on further interest rate hikes from the US central bankers will be announced in a few hours. If the psychologically important threshold cannot be held, it would fall below the exponential moving average (EMA) of the past 200 days. That would give a clear bearish chart picture.
Just before the FED meeting… pic.twitter.com/CaMI5aWuWl
— hessian entrepreneur (@hesse12345) February 1, 2023
So there are hours of hope and trepidation before the market knows whether the rumors of a modest 0.25% rate hike will be confirmed. Many observers expect a large increase in market liquidity and suspect that many investors will not open their positions until the interest rate is decided.
The Fed’s Twitter account announced the January 31st FOMC press conference. It is scheduled for today, February 1, at 8:30pm CET. Interested investors can follow these live and learn directly about the result accordingly. And therefore also whether the profits of the Ethereum token, which closed every calendar week with a plus this year, are once again in acute danger.
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