Ethereum (ETH) is currently trading at a critical support zone around $2,800 - $2,850, facing key technical levels that could determine its next major move. However, beyond technicals, a significant macroeconomic event—the new U.S. tariffs on Canada, Mexico, and China—could introduce further volatility into the market.
These tariffs, announced by the Trump administration, include a 25% levy on Canadian and Mexican imports and a 10% tariff on Chinese goods. With potential ripple effects on global trade, inflation, and Federal Reserve policy, traders must factor in both technical and macro elements to navigate the Ethereum market effectively.
Ethereum’s Technical Landscape
Long-Term Structure (2W & 1W Charts)
• Ethereum is forming a falling wedge, a traditionally bullish reversal pattern if it breaks to the upside.
• The $2,800 - $2,850 region is a major support zone, with a key resistance area at $3,175 - $3,200.
• Breakout targets could extend to $3,600+, while a breakdown risks testing $2,500 - $2,600.
Medium-Term Outlook (3D & 1D Charts)
• ETH has tested the lower boundary of its descending wedge multiple times, showing strong buying interest.
• Volume has been increasing near support, indicating possible accumulation.
• The RSI (Relative Strength Index) is forming a bullish divergence—while price is making lower lows, RSI is making higher lows, a potential sign of reversal.
Short-Term (4H & 1H Charts)
• Ethereum recently rejected from $3,175, showing continued downward pressure.
• The Stochastic RSI is deeply oversold, suggesting a bounce is possible.
• The Bookmap heatmap shows strong buy liquidity around $2,800, reinforcing support at this level.
Macroeconomic Factors: U.S. Tariffs and Federal Reserve Policy
1. The New U.S. Tariffs
The Trump administration has announced new tariffs on Canada, Mexico, and China, including:
• 25% tariff on Canadian and Mexican imports.
• 10% tariff on Chinese goods.
• Canadian energy exports face a reduced tariff of 10%.
These tariffs are set to take effect on February 4, 2025 and could disrupt global trade, potentially leading to increased production costs in the U.S. economy.
2. Will Inflation Rise?
Historically, tariffs increase costs for businesses, potentially fueling inflationary pressure. However, it’s important to note that:
• During Trump’s first term (2017-2021), similar tariffs did not lead to major inflation.
• Inflation remained relatively stable until COVID-19 supply chain shocks and Federal Reserve monetary expansion in 2020-2021.
However, in the current environment, the impact could be different. With higher baseline inflation and ongoing Federal Reserve concerns, new tariffs may create additional inflationary stress.
3. Federal Reserve Response: Interest Rates & Market Liquidity
• If tariffs cause inflation to rise, the Federal Reserve may delay interest rate cuts—which could strengthen the U.S. dollar (DXY) and pressure risk assets like Ethereum.
• A stronger dollar historically leads to lower ETH prices, as crypto trades inversely to DXY.
• If the Fed maintains high interest rates longer than expected, liquidity in crypto markets may remain tight, limiting ETH upside.
Confluence of Technical and Macro Factors: What’s Next for ETH?
Given both technical and macroeconomic insights, here’s what traders should watch:
Bullish Scenario
✅ $2,800 support holds, leading to a breakout from the falling wedge.
✅ If ETH breaks above $3,175, next resistance at $3,600 comes into play.
✅ A weaker DXY (U.S. dollar) and Fed rate cuts could fuel a major rally.
Bearish Scenario
❌ A break below $2,800 could send ETH down to $2,500 - $2,600.
❌ If tariffs increase inflation and delay Fed rate cuts, ETH could face macroeconomic headwinds.
❌ If the dollar strengthens, ETH may see downward pressure.
Final Thoughts
Ethereum is currently at a major inflection point, both technically and fundamentally. While the falling wedge pattern suggests a potential breakout, macroeconomic factors—including new U.S. tariffs and Federal Reserve rate decisions—could significantly impact price action.
For traders, the $2,800 support zone is critical—holding above this level could fuel a rally, while breaking below it could signal further downside.
Key Levels to Watch:
✅ Support: $2,800 → $2,600 → $2,500.
✅ Resistance: $3,175 → $3,600 → $4,000.
Given the confluence of technical and macroeconomic factors, Ethereum remains a highly volatile asset. Traders should monitor economic data, Federal Reserve statements, and global liquidity trends to stay ahead of the next major move.
📊 What’s your ETH outlook? Share your thoughts below! 🚀
These tariffs, announced by the Trump administration, include a 25% levy on Canadian and Mexican imports and a 10% tariff on Chinese goods. With potential ripple effects on global trade, inflation, and Federal Reserve policy, traders must factor in both technical and macro elements to navigate the Ethereum market effectively.
Ethereum’s Technical Landscape
Long-Term Structure (2W & 1W Charts)
• Ethereum is forming a falling wedge, a traditionally bullish reversal pattern if it breaks to the upside.
• The $2,800 - $2,850 region is a major support zone, with a key resistance area at $3,175 - $3,200.
• Breakout targets could extend to $3,600+, while a breakdown risks testing $2,500 - $2,600.
Medium-Term Outlook (3D & 1D Charts)
• ETH has tested the lower boundary of its descending wedge multiple times, showing strong buying interest.
• Volume has been increasing near support, indicating possible accumulation.
• The RSI (Relative Strength Index) is forming a bullish divergence—while price is making lower lows, RSI is making higher lows, a potential sign of reversal.
Short-Term (4H & 1H Charts)
• Ethereum recently rejected from $3,175, showing continued downward pressure.
• The Stochastic RSI is deeply oversold, suggesting a bounce is possible.
• The Bookmap heatmap shows strong buy liquidity around $2,800, reinforcing support at this level.
Macroeconomic Factors: U.S. Tariffs and Federal Reserve Policy
1. The New U.S. Tariffs
The Trump administration has announced new tariffs on Canada, Mexico, and China, including:
• 25% tariff on Canadian and Mexican imports.
• 10% tariff on Chinese goods.
• Canadian energy exports face a reduced tariff of 10%.
These tariffs are set to take effect on February 4, 2025 and could disrupt global trade, potentially leading to increased production costs in the U.S. economy.
2. Will Inflation Rise?
Historically, tariffs increase costs for businesses, potentially fueling inflationary pressure. However, it’s important to note that:
• During Trump’s first term (2017-2021), similar tariffs did not lead to major inflation.
• Inflation remained relatively stable until COVID-19 supply chain shocks and Federal Reserve monetary expansion in 2020-2021.
However, in the current environment, the impact could be different. With higher baseline inflation and ongoing Federal Reserve concerns, new tariffs may create additional inflationary stress.
3. Federal Reserve Response: Interest Rates & Market Liquidity
• If tariffs cause inflation to rise, the Federal Reserve may delay interest rate cuts—which could strengthen the U.S. dollar (DXY) and pressure risk assets like Ethereum.
• A stronger dollar historically leads to lower ETH prices, as crypto trades inversely to DXY.
• If the Fed maintains high interest rates longer than expected, liquidity in crypto markets may remain tight, limiting ETH upside.
Confluence of Technical and Macro Factors: What’s Next for ETH?
Given both technical and macroeconomic insights, here’s what traders should watch:
Bullish Scenario
✅ $2,800 support holds, leading to a breakout from the falling wedge.
✅ If ETH breaks above $3,175, next resistance at $3,600 comes into play.
✅ A weaker DXY (U.S. dollar) and Fed rate cuts could fuel a major rally.
Bearish Scenario
❌ A break below $2,800 could send ETH down to $2,500 - $2,600.
❌ If tariffs increase inflation and delay Fed rate cuts, ETH could face macroeconomic headwinds.
❌ If the dollar strengthens, ETH may see downward pressure.
Final Thoughts
Ethereum is currently at a major inflection point, both technically and fundamentally. While the falling wedge pattern suggests a potential breakout, macroeconomic factors—including new U.S. tariffs and Federal Reserve rate decisions—could significantly impact price action.
For traders, the $2,800 support zone is critical—holding above this level could fuel a rally, while breaking below it could signal further downside.
Key Levels to Watch:
✅ Support: $2,800 → $2,600 → $2,500.
✅ Resistance: $3,175 → $3,600 → $4,000.
Given the confluence of technical and macroeconomic factors, Ethereum remains a highly volatile asset. Traders should monitor economic data, Federal Reserve statements, and global liquidity trends to stay ahead of the next major move.
📊 What’s your ETH outlook? Share your thoughts below! 🚀
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.