Ethereum Plunges as Rate Hike Bets Rise and Labor Market Resilience Weighs
Ethereum (ETH) is experiencing a correction after reaching $2,546 earlier in the day, as volatility rises in the broader cryptocurrency market. The largest smart contract token has dropped to around $2,438, with some analysts attributing the decline to profit-taking and caution among investors amid macroeconomic uncertainty.
The Fear & Greed Index remains high at 74, indicating a 'Greed' sentiment, but this is tempered by increasing rate hike bets. The US Nonfarm Payrolls (NFP) data released on Friday showed a strong increase of 162K in August, exceeding consensus estimates and highlighting the resilience of the labor market.
This has led to traders reassessing the probability of the Federal Reserve raising interest rates to the 3.75%-4.00% range, with the FedWatch tool showing a 60% chance on Friday, up from 49% the previous day. A tighter monetary policy is likely to weigh on risk assets like Ethereum, pushing investors into safer havens.
Despite the correction, technical analysis suggests that Ethereum's medium-term uptrend remains intact, with support emerging at the 50-day EMA around $2,153 and the 200-day EMA near $2,175. However, a deeper pullback would expose the 100-day EMA at approximately $2,069 as the next significant floor.