Ethereum extends losses as Fed's Waller puts a larger rate hike on the table and US CPI remains hot

Ethereum came under pressure yesterday as Fed's Waller surprised markets with some very hawkish remarks in his speech on the economic outlook. He suggested that a rate hike in December would be warranted regardless of yesterday's inflation data, adding that the only thing the data would influence would be the magnitude of the increase. In fact, he said that a Core CPI M/M reading of 0.3% or higher would lead him to vote for a larger 50 bps hike. His remarks led to a hawkish repricing, sending Treasury yields and the US dollar higher. This weighed on risk sentiment, putting downward pressure on Ethereum. The Core CPI then came in at 0.3%, sending Treasury yields and the US dollar even higher as expectations of a potentially larger rate hike increased. Meanwhile, nothing has changed on the US-Iran front. Qatar said yesterday that it had secured at least two weeks for diplomatic efforts, while acknowledging that significant differences remain. This suggests that expectations for an imminent deal may need to be repriced, potentially leading to a rebound in oil prices and a more negative risk sentiment. For now, the macro backdrop remains negative for Ethereum, unless we get a concrete breakthrough in US-Iran negotiations or a more dovish Fed.   ETHEREUM TECHNICAL ANALYSIS – DAILY TIMEFRAME On the daily chart, we can see that Ethereumextended the losses yesterday, with the price slowly approaching the key 1,900 level. If we get there, we can expect the buyers to step in, with a defined risk below the level, to position for a rally into the 3,400 level, with the downward trendline as the first target. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 1,500 level next. ETHEREUM TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME On the 4 hour chart, we have a downward trendline defining the bearish momentum. If we get a pullback, 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 extend the pullback into the major downward trendline. 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 trendline, while the buyers will need a breakout to open the door for new highs. The red lines define the average daily range for today. UPCOMING CATALYSTS Tomorrowwe get the latest US Jobless Claims figures. On Friday, we conclude the week with the US PPI data.  This article was written by Giuseppe Dellamotta at investinglive.com.