Ethereum price continued retreating as investors continued worrying about the rising bond yields. ETH crumbled to a low of $2,960, which was the lowest level since March 24th. It has dropped by more than 16% from its highest level this month.
US inflation ahead
There is nothing fundamentally wrong with Ethereum. Indeed, the number of transactions in its network has been steady in the past few months. DeFi, gaming, and non-fungible tokens (NFTs) are all doing modestly well.
At the same time, the transition from a proof-of-work (PoW) network to a proof-of-stake (PoS) is going on. On Monday, developers announced that the first mainnet shadow fork went live as the testing of the network continued.
In all, analysts expect that the merge of the existing Ethereum ecosystem with the beacon chain will complete in June this year. This will be an important milestone that will lead to a strong performance of apps built in Ethereum’s blockchain.
The main reason why Ethereum price is falling is related to the macro picture. The performance of the bond market is signaling that the Fed will keep pushing interest rates substantially higher in the coming months.
The Fed minutes published last week showed that more members of the Federal Open Market Committee (FOMC) were open to more tightening. Some, including the dovish Lael Brainard, have concluded that more hikes and quantitative tightening are necessary.
The latest US inflation data that comes out on Tuesday will send signals of how aggressive the Fed will be. Economists expect these numbers to show that the headline consumer inflation rose to 8.4% while core inflation jumped to 6.6%.
If the numbers are stronger than these, it will send a signal that the Fed will get more aggressive. This hawkish tone explains why Bitcoin, Ethereum, and Nasdaq 100 indices have declined sharply.
Ethereum price prediction
The daily chart shows that the ETH price has been in a strong bearish trend in the past few days. The coin has moved below the upper side of the ascending channel. It has also moved slightly below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved below the oversold level.
Therefore, Ethereum price will likely keep falling as bears target the lower side of the channel at about $2,650. A move above the upper side of the channel will invalidate this view.
The post Ethereum price prediction: Channel signals a drop to $2,650 likely appeared first on Coin Journal.
