Ethereum price started a fresh decline below $4,550. ETH is now consolidating and might decline further if it breaks the $4,250 support zone.

• Ethereum failed to extend gains and declined below the $4,550 zone.
• The price is trading below $4,450 and the 100-hourly Simple Moving Average.
• There is a key bearish trend line forming with resistance at $4,450 on the hourly chart of ETH/USD (data feed via Kraken).
• The pair could start a fresh increase if it settles above $4,400 and $4,450.

Ethereum Price Dips Sharply

Ethereum price failed to continue higher above the $4,650 zone and started a fresh decline, like Bitcoin. ETH price declined below the $4,600 and $4,550 support levels.

The bears even pushed the price below $4,420. A low was formed at $4,264 and the price is now consolidating losses and is well below the 23.6% Fib retracement level of the downward wave from the $4,637 swing high to the $4,264 low.

Ethereum price is now trading below $4,400 and the 100-hourly Simple Moving Average. On the upside, the price could face resistance near the $4,350 level. The next key resistance is near the $4,400 level.

The first major resistance is near the $4,450 level. Besides, there is a key bearish trend line forming with resistance at $4,450 on the hourly chart of ETH/USD. A clear move above the $4,450 resistance might send the price toward the $4,500 resistance or the 61.8% Fib retracement level of the downward wave from the $4,637 swing high to the $4,264 low.

An upside break above the $4,500 region might call for more gains in the coming sessions. In the stated case, Ether could rise toward the $4,550 resistance zone or even $4,620 in the near term.

Another Decline In ETH?

If Ethereum fails to clear the $4,350 resistance, it could start a fresh decline. Initial support on the downside is near the $4,250 level. The first major support sits near the $4,220 zone.

A clear move below the $4,220 support might push the price toward the $4,150 support. Any more losses might send the price toward the $4,120 region in the near term. The next key support sits at $4,050.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is gaining momentum in the bearish zone.

Hourly RSI – The RSI for ETH/USD is now below the 50 zone.

Major Support Level – $4,250

Major Resistance Level – $4,350

Key Takeaways

• Bitcoin is up close to 50% from its lows, but is still down over two-thirds from all-time highs
• Some on-chain metrics show how much the rally pales in comparison to the prior fall 
• Positive news from the industry remains few and far between, as market prepares for latest interest rate policy, to be revealed at FOMC meeting Wednesday

Let us start with a riddle. How much profit/loss have you made if an asset you own rises by 47%, having previously fallen by 77%?

The answer is a gruesome 67% loss. 

That is the predicament facing Bitcoin investors who bought at all-time highs in late 2021. While markets have kicked off the year in scintillating fashion, it is important not to lose perspective. 

Humans have short memories, though. With Bitcoin up nearly 50% from the lows post-FTX collapse, crypto markets have that giddy feel about them again. It’s amazing what hope can do for people, huh? And by hope, I mean hope that interest rates will come down again.

Federal Reserve controls the Bitcoin price

I wrote a piece last week about how this latest rally, if it shows anything, simply proves once and for all how much Bitcoin is trading as an extreme risk-on asset. 

Bitcoin was crushed last year as central banks worldwide flipped hawkish for the first time in Bitcoin’s existence. With the cheap money of the last decade no longer available, and stout yields available on other investments such as T-bills, high-risk assets collapsed. 

The tech sector, also notoriously sensitive to interest rates, has been sacking employees left, right and centre – Meta, Salesforce, Twitter, Google, and the list goes on. 

This latest rally now comes as inflation begins to cool, with hope renewed that the pain of suffocating monetary policy will, in fact, one day come to an end. 

Market remains ravaged

While the picture undoubtedly looks rosier than this time two months ago, the crypto market is still in a world of pain. 

Bankruptcies are still flowing – see Genesis filing last week – while there are numerous other potential downside catalysts as the market still delves through Sam Bankman-Fried’s chaotic mess: DCG still present a lot of uncertainty, for example.

While prices have been running, there is no particularly good news to explain this rally. As I said, it’s all macro, with investors staring squarely at the Federal Reserve. 

A couple of charts paint a good picture of the pain still present in markets. Despite the recent upturn, the net realised profit marker, which is an on-chain metric calculated by comparing the price of recent coins moved to the price at which they previously moved, shows how much the recent rally pales in comparison to the scale of the fall last year. 

In truth, there is no need to complicate things. Despite the bluster of “hedge” narratives and “uncorrelated investment” that floated around through COVID, it is as clear as night and day that Bitcoin is trading off interest rate expectations right now. 

The below chart is perhaps the most important one in all of crypto over the last couple of years. 

That little bounce at the end could reverse very quickly depending on how things shake out at the upcoming Fed meeting. It could also do the opposite if things end up being more hawkish than the market has currently priced in. 

Either way, it is clear what is moving markets right now.

Cardano founder Charles Hoskinson has warned investors that more pain is coming from the recent collapse of cryptocurrency exchange FTX. He also noted that the incident would attract more regulatory scrutiny.

In his latest YouTube video, Hoskinson argued that the collapse of FTX was not the failure of crypto itself but rather the loss of the flawed and centralized infrastructure around the platform.

“Crypto didn’t fail. People failed. People in positions of trust. At the end of the day, as much as we like to believe in the principles of cryptocurrency, this had everything to do with people putting their money in centralized exchanges and organizations entrusting centralized businesses to do something on their behalf,” he said. 

He noted that the fallout of FTX will likely lead to increased scrutiny of the crypto industry. “There’s a very high possibility that the fallout of this will be new legislation, hopefully, decent legislation, but there’s a strong possibility that it won’t be.”

In an earlier video last week, Hoskinson claimed that the fallout of crypto exchange FTX might be among the last crises to hit the industry. But he noted that since these incidents have ripple effects on other ecosystem players, they are getting more and more complicated and hard to predict.

“I think this might be the bottom, one of the last ones to deal with. It’s going to be hard to predict how bad it will be, and it could certainly potentially be very bad. There are not many more firms that were like FTX or Alameda or like, Three Arrows Capital, and so forth,” 

As reported, FTX announced that it filed for Chapter 11 bankruptcy in Delaware on Thursday, putting an end to its desperate scramble for investors to repair its balance sheet. Notably, FTX US, the US arm of the crypto exchange, has also been included in the proceedings, despite claims by the former CEO that their US exchange was fine.

Michael Saylor Expects More Regulatory Scrutiny

Notably, Hoskinson is not the only one predicting increased regulatory scrutiny. Former Microstrategy CEO Michael Saylor also believes the fallout of FTX will surely attract more regulatory scrutiny. However, he said if regulators move too aggressively in response to FTX’s implosion, it will harm the industry.

However, the Bitcoin bull argued that the flagship cryptocurrency and a “handful” of other coins would benefit from the collapse of FTX as it will eliminate thousands of useless cryptocurrencies. 

Product Lead at the Dogecoin Foundation Timothy Stebbing announced a new tool in “the war against Dogecoin FUD” – Dogepedia.

Stebbing’s recommended action when encountering fear, uncertainty, and doubt is to refer the fudster to Dogepedia and inflict “9999 emotional damage” on the guilty party.

Hey #dogecoin, there’s a new weapon in the war against dogecoin FUD, we call it the Dogepedia!
https://t.co/Lf1ZJWdg46

How to use:
1. encounter FUD
2. link article from dogepedia
3. 9999 emotional damage pic.twitter.com/5eLdUjpbyL

— Timothy Stebbing (@tjstebbing) July 27, 2022

Dogecoin Foundation release Dogepedia

Dogepedia is a comprehensive directory of all things Dogecoin, including guides and FAQs. But, unlike Wikipedia, the content is not user-generated, nor can it be edited by anyone, which may be advantageous in keeping the content correct.

“Dogepedia is the resource containing Documentation, Guides, FAQs and Resources related to Dogecoin. The place to be for all shibes trying to learn about Dogecoin and crypto. Such knowledge! Much wow!”

The listed sections include Dogecoin basics, wallets, using your DOGE, community and ecosystem, running nodes, mining, development, how-tos, and FAQ and FUD. Each section contains several links to break the topic down further.

Interestingly, the FAQ and FUD section addressed multiple criticisms leveled at the meme coin, including it being a joke, a lack of utility, and having no hard cap. On Dogecoin being a joke, Dogepedia said:

“Despite Dogecoin’s genesis as a joke, though, more and more people are beginning to realise Dogecoin’s utilitarian value as a legitimate, efficient, and functional currency.”

How to get involved

Although the currently available content covers the most widely asked questions, Stebbing acknowledged that Dogepedia is a work-in-progress and requires input from the community.

He said community members can contact dev @inevitable360 and node operator @mishaboar to contribute to articles or chat about Dogecoin. While not the “perfect” system to build out a directory of content, Stebbing commented that it is the best way to garner community input at present.

“We know it’s not perfect (yet!) but we’re hoping this will be a resource the whole community can #BUIDL and use.“

Meanwhile, DOGE formed a local bottom at $0.0489 on June 18. This zone represents a strong level of support, having bounced at this level on two recent previous occasions.

Since then, a relatively sideways pattern has played out, with the $0.0788 price level proving tough resistance to crack. During this phase, the accompanying volume has been flat.

Wednesday saw 9% gains to close the day at $0.0674. Today sees a continuation of buying as DOGE looks to retest $0.07.