Ethereum’s native token, Ether (ETH), gained alongside riskier assets as investors assessed weak U.S. economic data and its potential to cool down rate hike fears.
Ether mirrors risk-on recovery
ETH’s price climbed up to 8.31% on June 24 to $1,225, six days after falling below $880, its lowest level since January 2021.
Overall, the upside retracement brought bulls 40% in gains, raising anticipations about an extended recovery in the future while alleviating fears of a “clean fakeout.”
For instance, independent market analyst “PostyXBT” projected ETH’s price to close above $1,300 by the end of June.
In contrast, analyst “Wolf” feared that bears would attempt to “push price back to $1,047,” albeit anticipating a run-up toward $1,250 if ETH holds above its diagonal trendline support, as shown below.
$ETH 4h.
If the trend change is real, then we will soon find out. Bulls must hold this diagonal and see this type of scenario.
Bears, instead will try to push price back to 1047 pic.twitter.com/PRG9fD4iRz— Wolf (@IamCryptoWolf) June 21, 2022
Ether has come under pressure from the Federal Reserve’s hawkish policy in 2022. But those fears appear to be subsiding after the latest U.S. composite purchasing managers report, which shows the manufacturing activity fell to a five-month-low.
“Growth is coming down, maybe even sooner than expected,” Esty Dwek, chief investment officer at FlowBank, told the Wall Street Journal, adding:
“That should allow the Fed to soften at some point.”
Still, Greg Peters, co-chief investment officer at PGIM Fixed Income, warned that the current rally in the risk-on markets might not last. He is unconvinced that “the central banks will stop tightening if economies slow.”
Classic bullish reversal setup in play
Ether’s rebound on June 24 also had it break above a falling resistance trendline that constitutes an “inverse head-and-shoulders” pattern (IH&S).
In detail, Ether has formed the…
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