FX.co ★ Technical Analysis of ETH/USD for July 20, 2022

Crypto Industry News:

Ethereum went up by 48% on a 7-day scale. This is the result of waiting for the Merge, i.e. the network's transition to a new coin mining algorithm (blockchain will stop being Proof-of-Work and start on Proof-of-Stake). The bulls are already seeing the first signs that the downtrend is turning into an uptrend. Is it really so?

Changes to the ETH network will reduce the energy consumption of the project's blockchain by more than 99%. However, they will not necessarily reduce transaction fees significantly. The latter will also be done by sharding, but it will not happen until next year.

In any case, the Ether market is all green again. 1 ETH is $ 1,590, which is 48% more than a week ago.

But let's take a look at a study by Finder, prepared before the last ether price rally. It shows that there are still many negative aspects to Ethereum.

A panel of 54 industry experts judged that 1 ETH would be worth $ 1,711 by the end of 2022 and the price would rise to $ 5,739 by 2025. Then, by 2030, the rate will reach USD 14,412. However, analysts said the price would drop to USD 675 before the end of this year.

Finder also adds that there are several macroeconomic factors that could cause further declines. The US Federal Reserve is expected to raise interest rates again by 75 basis points. This will happen during her meeting on July 26-27. Further increases in interest rates may already be in the valuation of cryptocurrencies, but there is a risk that this will lead to further drops in BTC and ETH in the short term.

Technical Market Outlook:

The ETH/USD pair had broken above the supply zone located between the levels of $1,255 - $1,281 and made a new local high at the level of $1,631. The momentum is at the level of 70 points already, so the bulls are now fully controlling the market, however the market conditions are now extremely overbought. The intraday technical support is seen on the level of $1,319 and $1,281. The larger time frame trend remains down, however the recent breakout might be a beginning of a bigger bounce even towards the level of $1,750.

Weekly Pivot Points:

WR3 - $1,617

WR2 - $1,509

WR1 - $1,470

Weekly Pivot - $1,401

WS1 - $1,362

WS2 - $1,294

WS3 - $1,185

Trading Outlook:

The down trend on the H4, Daily and Weekly time frames had broken below the key long term technical support seen at the level of $1,420 and bears continue to make new lower lows with no problem whatsoever. So far every bounce and attempt to rally is being used to sell Ethereum for a better price by the market participants, so the bearish pressure is still high. The next target for bears is located at the levels below $1,000, like the last swing low seen at $880. Please notice, the down trend is being continued for the 13th consecutive week now.