Ethereum Price News: Kevin Warsh’s New Approach Could Plunge ETH to $1,400

Ethereum (ETH) has gone down by nearly 18% in the past 30 days and is once again rejecting a move above $1,800 after the new head of the Federal Reserve held his first press conference yesterday.

Kevin Warsh confirmed what the market was already expecting – no changes to the federal funds rate for the time being.

However, he outlined a new approach to many aspects of the Fed that could rattle the markets, as they will reduce investors’ visibility into what’s coming.

The Market is Fully Pricing an Interest Rate Hike in September

In general, Warsh will create several task forces to handle the most relevant affairs concerning the Fed’s activities, including communications and policy. The new Chairman also abstained from sharing his views on interest rates, as was customary.

“I did not submit a dot [plot] for me,” Warsh said. “It’s not helpful in the conduct of policy.”

However, the general view is that Warsh will fight inflation no matter what, as he indicated that allowing prices to increase across the economy is a “choice.”

As a result, data from the CME Group’s FedWatch Survey show that the odds of a rate hike in September have now increased to more than 70% – up 100 basis points after this week’s FOMC meeting.

The market is now fully pricing a rate increase, and that could set the stage for further downward pressure in the near term for Ethereum and other cryptocurrencies.

Ethereum Sees Rising Selling Pressure After Crossing Key Resistance

Looking at the daily chart, we have already seen a rejection of the $1,800 resistance, even though the retreat has been mild… for now.

We were initially anticipating a rally to $2,400 if the end of the war with Iran managed to push ETH above that key level. However, the buying pressure was not strong enough to achieve this.

That doesn’t mean that a breakout can’t happen. It is simply not what we are seeing right now. Today’s American session could define the course of the token for the weekend, depending on whether this rejection of the $1,800 level is confirmed or a breakout occurs.

Our bearish target for ETH, if that breakout occurs, would be the $1,400 area, as the macroeconomic landscape has deteriorated.

Even though the price of oil has retreated and geopolitical tensions are apparently diminishing, inflation is running hot in the United States. Paired with a hawkish Chairman who clearly sees that as a problem, the path to improving market sentiment right now is far from clear.

Buy Signal Popped Up Before ETH Hit $1.8K

Moving down to the 4-hour chart, our signals system flashed a “buy” on Sunday, as trading volumes picked up.

Our system identifies specific candle patterns that are accompanied by above-average trading volumes. When signals like these occur near key levels, we pay more attention as they tend to be high-probability setups.

Since this signal popped up near that $1,800 threshold, if we get a bullish breakout, that should be enough to confirm that institutions and whales are participating in the move.

The price briefly crossed that $1.8K mark, but the selling pressure ramped up quite rapidly. Bulls need to make another appearance to push ETH higher or otherwise risk a significant drop over the next few days.