On Wednesday’s announcement that the US is pausing tariffs for 90 days for all countries except China, the stock markets across the world, plus the crypto market, shot skywards. However, after gains on the day by $ETH and $SOL of 12.4% and 13.2% respectively, both layer 1 cryptocurrencies have dropped more than 4% on Thursday. Where are they going next?
Market drops on better than expected CPI data release
Before going on to analyse the price action for $ETH and $SOL, it has to be taken into consideration that the Trump tariffs are not done yet, and that the U.S. CPI data has just been released.
On this note, the CPI data makes generally positive reading. The month on month reading for Core CPI is 0.1% from a forecast 0.3%, while the year on year reading for CPI is 2.4%, which is better than the 2.5% forecast. Unemployment claims were exactly as expected at 223K, which is slightly up from the previous figure of 219K.
All this said, the crypto market is down on the news. This is probably because of ongoing tariffs fallout, and also because traditional markets have opened, and some reversal of yesterday’s big gains is taking place.
$ETH downtrend continues
Source: TradingView
The short-term time frame for $ETH shows the tumbling descent for the price. A higher high and low must be put in, and soon, in order to arrest the descent. Wednesday’s pump succeeded in taking the price back to the descending trendline, but unless it pushes through and confirms above, it will be to no avail.
That said, the price may just be coming back to confirm the retaking of the horizontal support at $1,600. For the downtrend to start reversing, the bulls will need to break through the descending trendline, and make a new higher high above $1,960.
Could the tide be about to turn for $ETH?
Source: TradingView
The weekly timeframe for $ETH shows that the price is currently holding to the very important $1,600 horizontal support. A candle wick through, and down to $1,400, which incidentally marks the top of the 2017/2018 bull market, signals that the bulls are serious about defending this level.
At the bottom of the chart, the Relative Strength Index on the weekly has reached the third lowest point in $ETH’s history. Is the tide about to turn? This may be in the hands of a certain U.S. president.
$SOL bulls attempt to arrest precipitous slide
Source: TradingView
The 8-hour time frame for $SOL is similar to that of $ETH, with a fairly precipitous slide leaving a trail of lower highs and lower lows in its wake. Just having been rejected from the trendline once again, the bulls are currently seeking to make the $112 resistance a support again.
$SOL price between critical support and resistance levels
Source: TradingView
The weekly chart for $SOL displays the vital horizontal support at $94, and also the critical narrow band of resistance that stretches from $112 up to $122. At the bottom of the chart, the Stochastic RSI shows that the indicator lines are dragging along the bottom. While this could persist, the lines will turn up sooner or later. If they can get above the 20.00 level, this would signal strong upside price momentum.
A big catalyst to ignite markets
For both of these leading layer 1 networks, any future rally will very much depend on the health of the market in general. With just one announcement on Wednesday, President Trump was able to stop the slide in global markets. Could a big catalyst be around the corner? Could this be something along the lines of a deal with China?
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Credit: Source link
