The Ethereum price has been under pressure in the past few days after it rose to a three-year high of $1,472. The ETH price is trading at $1,291, which is 12% below this week’s high. Its market cap has dropped to more than $147 billion while the total market cap of all cryptocurrencies tracked by Investing.com has fallen to more than $932 billion.
What’s happening: The price of Ethereum and other digital currencies has dropped substantially this week after the Senate confirmed Janet Yellen as the new Treasury Secretary.
In her confirmation hearings, the former Fed chair said that the government needed to act to curtail the use of cryptocurrencies. Therefore, the digital currencies have fallen because investors now expect more regulations on crypto wallets.
Ethereum price is also falling because of an upcoming Bitcoin ETF. Since BTC and ETH have a correlation, analysts believe that the former is falling because the SEC is said to be about to approve an ETF. If this happens, it means that investors will possibly sell their holdings in the expensive Greyscale Bitcoin Trust that is seen as being expensive.
The ETH price is also likely falling because of the relatively stronger dollar ahead of the Fed interest rate decision. Finally, as I noted last week, Ethereum is in its handle part of the cup and handle pattern. The handle part usually sees some consolidation ahead of an imminent breakout. A good example is what is happening in the price of gold, as I wrote yesterday.
Ethereum price technical outlook
The four-hour chart shows that the ETH price formed a double-top pattern this week. In most cases, this is usually a signal that the price will pull-back. Also, we see that the price has formed an ascending trendline. It is also at the same level as the 15-day and 25-day exponential moving averages. Therefore, in my view, the bullish trend will continue so long as the price is above the ascending trendline. Bearish signals will emerge if it falls below $1235.
ETH price chart