On Saturday, Ethereum (ETH) slid by 7.78% to end the day at $1,530. Support at $1,500 limited the downside.
News of a possible delay to the Ethereum transition to the more environmentally friendly proof-of-stake protocol added to the downside pressure.
Technical indicators flash red, with ETH sitting below the 50-day EMA.
On Saturday, Ethereum (ETH) slid by 7.78%. Following a 7.10% decline on Friday, ETH ended the day at $1,530.
A mixed start to the day saw ETH strike an early morning high of $1,680 before hitting reverse.
Falling short of the Major Resistance Levels, ETH slid to a day low of $1,500. The extended sell-off saw ETH fall through the First Major Support Level at $1,610 and the Second Major Support Level at $1,558.
Finding support at $1,500, ETH wrapped up the day at $1,530, with the Second Major Support Level pegging ETH back.
Significantly, ETH fell to a new 2022 low and to the lowest level since May 3, 2021.
Ethereum Weighed by Network News Updates and US Inflation
On Friday, US inflation figures for May sent riskier assets into a tailspin. Tracking the US equity markets, Ethereum slid to sub-$1,700 levels in response.
The US annual rate of inflation accelerated from 8.3% to 8.6% in May, a new 40-year high. The spike raised concerns over the Fed taking a more aggressive interest rate path trajectory to curb inflation.
Market sentiment failed to improve on Saturday, with Ethereum joining the broader crypto market in the deep red.
Over the two days, the total crypto market cap slid by $97 billion.
Adding further downward pressure on Ethereum this weekend was news of a migration delay to the Proof-of-Stake network.
On Saturday, Bloomberg reported developer plans to delay the ‘difficulty bomb’ that gradually removes miners from the blockchain by increasing mining difficulty. The difficulty bomb will take mining difficulty to a level where no ETH miners remain.
The latest delay has raised concerns that the migration to the proof-of-stake protocol (the Merge) could happen after the anticipated August Merge date.
According to the report, however,
“Developers emphasized the difficulty bomb delay has no implications for the timing of the Merge.”
Ethereum (ETH) Price Action
At the time of writing, ETH was up 0.35% to $1,536.
ETH will need to move through the $1,569 pivot to target the First Major Resistance Level at $1,640 and test resistance at the Saturday high of $1,680.
ETH would need broader crypto market support to return to $1,600 levels.
An extended rebound would test the Second Major Resistance Level at $1,750. The Third Major Resistance Level sits at $1,930.
Failure to move through the pivot would bring the First Major Support Level at $1,460 into play. Barring another extended sell-off, ETH should avoid sub-$1,400. The Second Major Support Level sits at $1,390.
Looking at the EMAs and the 4-hourly candlestick chart (above), it is a bearish signal. ETH sits below the 50-day EMA, currently at $1,744. This morning, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA fell back from the 200-day EMA; ETH price negative.
Failure to move through the 50-day EMA would leave sub-$1,500 in play.
This article was originally posted on FX Empire