Ethereum (ETH) inched close to the $1,90o mark in reaction to the US Consumer Price Index (CPI) data which came in at 4.9% below the forecasted 5%. The largest altcoin by market capitalization rose a few minutes after the US Bureau of Labor Statistics (BLS) released the data.
CPI Data Release Drives Ethereum Price 5% To $1,880
Ethereum trades in the read at $1,831 in a downtrend that is persisting for the sixth consecutive day. The reading of the US CPI data fueled Ether’s 5% higher to reach a high of $1,888 on Wednesday.
CPI data is a well-known economic metric that is used to determine the level of inflation and consumer price changes in an urban setting over time.
The CPI decline to 4.9% year-on-year last month came it lower than the expected 5%, while Core CPI increase by 0.4% matched market expectations and estimates.
The asset is now turning down after being rejected by resistance from the 50-day Simple Moving Average (SMA), which is currently sitting at $1,882.
As long as Ethereum price sustains below the $1,882 level, the downtrend is intact. If this happens, ETH may drop below the major support level around $1,820 and later revisit the 100-day SMA which is currently found at $1,753.
Traders could expect Ethereum to take a breather here, given that the moving average has provided dynamic support for the second largest crypto since March 11.
ETH/USD Daily Chart
Apart from the negative price action, the downward movement of the Relative Strength Index (RSI) adds credence to the grim outlook. The position of this trend-following oscillating indicator at 44 suggests that there are still more sellers than buyers in the market.
Ethereum’s downside is further validated by data from IntoTheBlock, an on-chain data and market insights analytics firm. Its In/Out of the Money Around Price (IOMAP) model shows that the price faces a stiff resistance around the area where the 50-day SMA lies.
The IOMAP chart below shows that this areas is within the $1,834 to $1,886 price range where approximately 8.24 million ETH were previously bought by roughly 2.43 addresses.
Any attempts to push the price above this level would be met by intense selling from this cohort of suppliers who would want to break-even.
Ethereum IOMAP Chart
Therefore, those who want to go long on Ethereum should wait for the decisive close above the 50-day SMA, which could invalidate the bearish thesis for the asset.
If this happens, the next logical move would be a return to areas above $2,000 by revising the $2,023 range high. Such a move would represent a 10% climb from the current.
