Ethereum’s price dropped below $2400 on September 2 due to increased tensions between Iran, the United States, and other countries. The renewed conflict pushed up oil prices and Treasury yields, reducing demand for risky investments.
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- Ethereum fell below $2,550, its intraday low, after failing to overcome resistance.
- CoinGlass’ data shows that in 24 hours about $94.2 millions worth of ETH Futures positions have been liquidated.
- The 4-hour momentum indicator moved further into the negative zone, as did the daily RSI.
- Support at $2,300 will determine if ETH stabilises or continues its fall towards $2200.
Ethereum drops to below $2,400
Crypto.news reports that Ethereum (ETHPrice traded around $2372 when this was written, down approximately 1.9% from the previous day’s low of $2356, after having reached an intraday minimum of $2356. The latest decline extended a pullback from the Aug. 27–28 highs near $2,510.
ETH is now down about 5,5% since the top of this range. Sellers also drove the token past the psychological $2,400 level that had previously limited several drops in the last two weeks.
Ethereum’s 4-hour chart shows a series lower highs following its attempt to gain $2,500 Aug. 31. On Sept. 2, the selling accelerated, with the 4-hour candle launching near $2418 and falling to as low as $2,500.
Ethereum’s August rally hasn’t been erased by the decline. ETH continues to be above the 20-day daily simple moving-average at $2,299 and its 50-days, 100-days and 200-days averages of approximately $2.054, $2.053, $1.903 and $2.030.
If you hold above these averages, the medium-term structure is stronger today than before Ethereum’s August breakout. However, the short-term tendency has decreased.
US-Iran tensions pressurize crypto markets
The United States and Iran have exchanged diplomatic relations, putting pressure on global markets fresh strikes Near the Strait of Hormuz. Brent crude pushed to close $95 per barrel after the incident, raising concerns of inflation.
Oil prices increased, causing a bond sale. US Treasury yields rose above 4,8% for the first time in three years. Higher yields may reduce the demand for certain assets, such as cryptocurrency. This is because government bonds offer higher returns without requiring investors to assume comparable risks.
As investors took defensive positions, the dollar strengthened further. This added another pressure on dollar-denominated currencies such as ETH.
US monetary policy has added to uncertainty. The Institute for Supply Management reported that its manufacturing purchasing manager’s index dropped to 54.6 from 55.6 last month. The manufacturing purchasing managers’ index fell below the market expectation of 55.2, but still showed growth.
As a result of persistent pressures on prices and rising energy costs, there are increased expectations the Federal Reserve will raise interest rates in its September 16th meeting. Reuters reported the markets had assigned a probability to a rate hike of approximately 68%, which is another hurdle for a rapid Ethereum recovery.
Liquidations amplify Ethereum’s decline
After ETH’s short-term stability, derivatives increased their activity. CoinGlass data In the last 24 hours, positions in Ethereum futures worth approximately $94.2 Million were liquidated.
Ethereum’s futures volume was about $54.43billion, and the open interest for these contracts stood at around $22.48billion. These figures show that leverage is still high despite recent position closings.
The heatmap for the one-week CoinGlass liquidity shows that ETH went through several long clusters of leveraged ETH between $2400 to $2360. Liquidity remains visible below the current price around $2,350–$2,320, creating a possible area of further volatility if selling continues.
Larger concentrations sit above the market near $2,480–$2,510, while the strongest visible overhead cluster is close to $2,540–$2,560. If ETH were to recover to these zones, some of the short positions would be closed. But first, ETH must regain 2,400 dollars and change its lower-high chart structure.
Heatmaps for liquidation are used to estimate when leveraged positions could be closed. The heatmaps do not ensure that the market will be pushed towards a particular liquidity cluster.
Ethereum’s momentum weakens at key support
Ethereum’s relative strength index for the day fell from 59.46 to 59.46, after it moved above the threshold of overbought during the rally in August. This reading is still above neutral 50 but it’s trending down, showing that the bullish momentum in Ethereum has diminished.
The short-term indicators tend to be less positive. The 4 hour moving average convergence divergence stood at minus 13,66. This is below the signal line of minus 5,58. MACD Histogram is also negative, at about minus 808.
The Awesome Oscillator has dropped to minus 46.49. This confirms the signal that the price structure for the 4 hour period is bearish. The two indicators indicate that the sellers are in control of short-term price movements, but neither indicates how much further down they will go.
The 20-day moving average is located near the $2,299 mark. This first support area lies between $2,350. The daily close could fall below $2,200. Ted Pillows, an analyst, has identified this level as the next target if ETH does not hold its 50 week exponential moving average.
On the upside ETH has to first reclaim about $2,400. A break above the $2,500–$2,550 resistance zone would weaken the bearish setup and place the August highs back in focus.
Crypto analyst Crypto XLARGE separately pointed In assessing Ethereum’s relative performance to Bitcoin, it was noted that the ETH/BTC candle had closed higher than its moving average of 20 months. According to the analyst, confirmation would require the average moving forward becoming support. If the breakout is sustained, ETH/BTC could reach 0.050 and 0.088.
The immediate external factors for US investors are oil prices, Treasury rates, and the Federal Reserve’s decision in September. The continued escalation of the US-Iran conflict could continue to put pressure on Ethereum. However, a drop in energy prices, or lowered expectations for rate hikes, may be able to help ETH maintain its $2,300 level.
Disclosure: This article doesn’t represent investment advice. This page is intended for informational purposes only.
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Source: crypto.news
