Ethereum price remained above the crucial resistance level at $2,000 on Thursday as the crypto market held fairly steady despite the ongoing challenges in the energy markets. ETH token was trading at $2,025, down substantially from the all-time high of $4,950. This article explores why the coin may be at risk of falling to $1,500.
Ethereum price to retreat as the Iran war will be longer than expected
The most important reason why the Ethereum price may continue falling in the near term is that the Iranian crisis will continue for longer than expected.
In a statement on Wednesday, Trump hinted that the US was ahead of schedule in its mission and signaled that it will end in the next two weeks. This schedule means that he hopes that it will end before his trip to China on March 31st.
While this is a positive move, the reality is that Iran has all the cards now and it is not in its interest to end the war in Trump’s terms. Instead, the country’s goal is to inflict substantial pain on the United States, including by pushing crude prices to the highest level on record.
Indeed, data shows that Brent crude oil price has jumped to $100 despite Trump’s measures to limit the climb. It rose even after the US announced that it would release over 172 million barrels from its Strategic Oil Reserves. This release will be part of the 400 million that the International Energy Agency (IEA) has suggested.
Iran also understands that ending the war now will leave it vulnerable to more attacks by the United States and Israel in the coming years. As such, demonstrating its power in the energy market will act as a prevention measure for this.
Soaring crude oil prices mean that global inflation will continue rising this year, making it hard for central banks to cut interest rates. Historically, Ethereum and other cryptocurrencies do well when the Fed is cutting interest rates.
These risks explains why flows in Ethereum ETFs have been limited in the past few months, a sign that investors are cautious. Data shows that the spot Ethereum ETFs inflows rose by $57 million on Tuesday after gaining by $12.5 million a day earlier. Three inflows bring the cumulative monthly figure to just $41 million.
ETH ETFs have shed over $4 billion in assets in the past few months, bringing the cumulative total net inflows to $11.65 billion. These funds now hold $11.85 billion in assets under management.
Ethereum futures inflows have remained under pressure into the past few months. While the figure has risen this month, it remains much lower than last year’s high of $42 billion.
ETH price prediction: Technical analysis
The weekly chart shows that the Ethereum price has tanked from the all-time high of $4,950 in August last year to the current $2,000.
Most recently, the coin has stagnated at the current level, leading to modest ETF inflows and futures open interest surge.
However, the coin remains much lower than all moving averages, while the Supertrend indicator is in the red. It has also sunk below the 61.8% Fibonacci Retracement level at $2,460.
The coin seems to have invalidated the inverted head-and-shoulders pattern, which is a common bullish reversal sign in technical analysis.
Therefore, the token will likely resume the downward trend, potentially to the psychological level at $1,500
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