Ethereum price has been under intense pressure for the past few days as the crypto market struggles to recover from last week’s massive sell-off following the SEC lawsuit against Binance and Coinbase. Ether has crashed by more than 8% in the past week, dipping below its crucial support of $1.8K. Ethereum’s total market cap has increased slightly over the last day to $209 billion, while its total volume fell by 1.29%.
The cryptocurrency market has been showing signs of stability since the start of the week after the SEC’s accusations against Binance and Coinbase sparked a sharp sell-off in crypto prices. However, Ethereum price seems to remain flat, below the important $1,800 zone. Ethereum, the largest altcoin by market cap, is down by more than 3% over the past month but remains 45% higher in the year to date.
The US Securities and Exchange Commission (SEC) accused Binance and Coinbase last week of selling unregistered securities and failing to register as exchanges. In its complaints, the SEC also mentioned a slew of altcoins, including Solana, Cardano, and Polygon, deeming them as securities. Being the largest cryptocurrency exchange platform, the lawsuit against Binance saw the crypto market enter a freefall, recording its worst week since the start of the year.
Most markets edged higher on Tuesday after data by the US Labor Department showed that the inflation cooled down in May. The US Consumer Price Index (CPI) increased by 0.1% in May, down from 0.4% in April, while the annual inflation rose by 4.0%, in line with analysts’ expectations, hitting its lowest level in more than two years. The 3.6% decline in energy prices over May, outweighed the increase in shelter and vehicle prices.
With the slowdown in the key inflation data, markets are now pricing in a 93% chance that the US Federal Reserve will pause its interest rate hike campaign in June. The Fed started its two-day monetary policy meeting on Tuesday and is expected to announce its interest policy decision later on Wednesday. The European Central Bank (ECB) and the Bank of Japan (BoJ) are also expected to announce their interest rate decisions later this week.
Ethereum Price Outlook
The Ethereum price has been moving trading sideways for the past few days in the wake of the bombshell SEC lawsuit against Binance and Coinbase. On the daily chart, the ETH price is moving below and slightly above the 50-day and 200-day exponential moving averages. It is also moving below the 50-day and 100-day simple moving averages. Its Relative Strength Index (RSI) has continued moving lower, below the signal line, and 8 points closer to the oversold region.
As such, a hawkish Fed is likely to spark some recovery into the Ethereum price but will not be enough to sustain the asset’s upward momentum. A move below the 200-day EMA at $1,728 will see the bears push the price lower to find support at $1,693.15. However, we cannot rule out a flip above the $1,845 zone which will invalidate the cautiously bearish thesis.