United States headline PCE inflation rose 3.7% year-on-year in July, exceeding analysts’ consensus estimate of 3.6%. The hotter-than-expected release influenced money market expectations, raising the probability of a Fed interest rate hike in September from 36% to 44%. Meanwhile, Core PCE remained in line with forecasts, holding steady at 0.2% month-on-month and 3.3% year-on-year.
Ethereum traded around the $2,500 level on August 28 after pulling back from an intraday high of $2,533. The second-largest cryptocurrency’s price action is forming an ascending triangle pattern on the four-hour chart. Major resistance is currently capping upside momentum in a tight range between $2,533 and $2,550 - a formidable barrier that has repeatedly rejected buyers since August 21.
Momentum Slows in Overbought Territory
Various trend indicators are starting to signal exhaustion. Ethereum’s daily Relative Strength Index (RSI) climbed to 77.4, well above the 70 mark typically considered overbought. While the MACD indicator’s main line remains in positive territory, its histogram bars are contracting, suggesting that upward momentum is gradually waning.
On the other hand, the Aroon Up indicator printed 57.14% compared to Aroon Down at 21.43%. This confirms that the most recent high was formed more recently than the lowest low, keeping the upward trend intact. Market analyst Daan Crypto Trades noted that Ethereum has achieved a solid breakout and a higher high on the weekly timeframe. However, he warned that a pullback below the $2,300 support line would invalidate the positive market structure.
What Lies Around $2,550?
Fund flow data in traditional investment vehicles also pointed to a sharp shift in sentiment. US spot Ethereum ETF products recorded up to $192 million in inflows during the August 26 session. Just one day later, that momentum reversed as $11.4 million was withdrawn from the same ETF funds.
Derivatives market data reveals large clusters of leveraged liquidation orders concentrated on both sides of the $2,550 level. A decisive breakout above this critical resistance could trigger a short squeeze, propelling prices higher. Conversely, a rejection from this barrier could drive prices down just as quickly.
Awaiting the Bond Market’s Reaction
The United States Treasury Department is set to ramp up its long-dated bond buyback operations, increasing from an initial $2 billion to a minimum of $4 billion per auction starting September 9. The impact of this liquidity-easing measure on Ethereum will largely depend on the direction of US Treasury yields in the market.
Reported by crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
