Ethereum consolidates as focus shifts to US midterm elections while US-Iran negotiations continue

Ethereum sold off on Thursday following the news of the Binance security breach. The sharp increase in liquidations across the market amplified the downside. Nevertheless, Ethereum eventually rebounded as Binance pledged to cover customer losses and concerns about broader contagion gradually eased. Improving sentiment around US-Iran negotiations and the prospect of lower oil prices also helped support risk appetite. Looking ahead, the macro backdrop remains challenging with inflation risks, growth concerns, expectations of further Fed tightening and geopolitical uncertainty limiting the potential for a sustained recovery. We will likely need a breakthrough in US-Iran negotiations or more dovish Fed signals to change the current bearish trend. A surprising Republican sweep in the US midterm elections could also provide additional support on expected fiscal expansion. A Democratic sweep, on the other hand, could put additional pressure on Ethereum if there’s no breakthrough in US-Iran negotiations, or worse, if Trump decides to escalate the war.   ETHEREUM TECHNICAL ANALYSIS – DAILY TIMEFRAME On the daily chart, we can see that Ethereumhas been on a sustained downtrend for a month as macro headwinds kept weighing on the cryptocurrency. We have a downward trendline defining the bearish momentum. We can expect the sellers to lean on the trendline, with a defined risk above it, to keep targeting the 1,900 level. The buyers, on the other hand, will want to see the price breaking higher to pile in for a rally into the 3,400 level next, with the 2,575 level as the first target. ETHEREUM TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME On the 4 hour chart, we have another trendline that’s been acting as resistance. The sellers might want to split their positions between the minor and the major trendline in case the price breaks the minor trendline. The buyers, on the other hand, will look for breakouts to position for new highs, with the 2,575 level as the first major target. ETHEREUM TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME On the 1 hour chart, there’s not much we can add here as the sellers will have a better risk to reward setup around the trendlines, while the buyers will need breakouts to open the door for new highs. The red lines define the average daily range for today. UPCOMING CATALYSTS Todaywe have the US Job Openings data and the US midterm elections, although we will get the first results early tomorrow. Tomorrow, we have the US ADP and the US ISM Services PMI. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report and the University of Michigan Consumer sentiment survey. This article was written by Giuseppe Dellamotta at investinglive.com.