A widely followed crypto analyst says that macro conditions could spell trouble for the leading smart contract platform Ethereum (ETH).
In a new video update, DataDash host Nicholas Merten tells his 515,000 YouTube subscribers that macro factors could overshadow the hype surrounding Ethereum’s upcoming merge to a proof-of-stake consensus mechanism.
“The Federal Reserve, as we saw through [the latest] meeting minutes, irrespective of The Merge in Ethereum and all these great technological innovations, the monetary policy outlook is mixed, and that is not what the market was looking for. You can clearly see that reflecting in equity prices over the past few days since that meeting back on Wednesday. Since back on the 17th, we’ve been slowly ticking down with [bearish] momentum building up.”
With the macro backdrop serving as a headwind for the crypto markets, Merten says that both Ethereum and Bitcoin (BTC) are now showing signs of waning momentum.
“Whereas Ethereum’s been quite strong, it started to look exhausted over the past few weeks. And Bitcoin, which really should be leading the pack as the largest cryptocurrency in a generally risk-off environment… but it wasn’t. It was showing incredible signs of weakness. Every time Bitcoin’s price would tick up, you’d have a follow through of about six to seven days of slow red candles.”
Merten also highlights that the Ethereum in its Bitcoin pair (ETH/BTC) also looks overextended from its over 50% rally in about two months.
“ETH/BTC ratio, we talked about the other day that [it] started to looks exhausted. It’s getting up towards the previous range where we started to set temporary highs in price. And now, with the daily candle that we have here, this looks like further confirmation.”
Bitcoin is changing hands for $21,355 at time of writing, a 2.5% gain on the day while Ethereum is trading for $1,590, a 3.9% gain in during the last 24 hours.
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