Following remarks made by Federal Reserve Chair Jerome Powell, the price of Ethereum is facing challenges as it struggles to confirm a clear upward trajectory. Powell’s statement on April 16 in Chicago indicated that the Federal Reserve is not rushing to lower interest rates, opting for a cautious “wait-and-see” approach that hinges on additional economic data. This cautious stance has led to an increase in Ethereum’s exchange inflows, pointing to a heightened potential for a bearish correction.
Ethereum is currently encountering escalating bearish threats, with its price showing a downward trend influenced by the Federal Reserve’s cautious economic outlook, dampening investor confidence. According to data from Coinglass, Ethereum witnessed approximately $40.6 million in liquidations over the past 24 hours, with long positions comprising around $26 million and short positions making up roughly $14.6 million.
The recent decline in price coincided with a notable surge in exchange reserves, as more than 77,000 ETH were transferred to derivative exchanges in a single day, marking the largest net inflow in several months. This sudden influx of supply raises the potential for selling pressure in the market.
Despite the downward pressure, data from IntoTheBlock indicates that the Netflow metric remains negative at approximately -6,800 ETH, suggesting that overall outflows have surpassed inflows, indicating that many investors are accumulating Ethereum amidst the price decline.
Coinglass data also reveals that open interest for Ethereum has been on the rise despite the downward pressure, with the OI metric surging by over 3.87% to exceed $18 billion. However, the funding rate has been hovering around the negative territory at 0.0015%, indicating that bears still have control to consolidate ETH with immediate Fib support levels.
Nevertheless, the current decline could potentially transform into a robust rebound soon. According to a CryptoQuant analyst, Ethereum is currently trading close to its realized price, a level that has historically signaled significant rebounds. The current realized price stands at approximately $1,585, serving as a strong level for value buying opportunities.
In terms of what lies ahead for ETH price, Ethereum’s attempt at a price recovery is facing resistance around EMA trend lines as bears strongly defend the EMA20 level. The price is currently hovering around the descending resistance line, with ETH trading at $1,588, reflecting a decline of over 1.5% in the last 24 hours.
If sellers manage to drive the price below $1,400, it could trigger a deeper decline towards the end of the bearish channel at $1,130. However, this level is anticipated to attract buying interest. On the upside, a decisive break and close above $1,700 would signal a potential rally towards $2K, with the possibility of surpassing the 50-day SMA if bullish momentum strengthens. A strong breakthrough above $2K would indicate a potential reversal of the downtrend.