Ethereum Price Faces Rejection at $1,620 in the Wake of Market Challenges

Ethereum price has been struggling in recent weeks on the back of its unstable on-chain performance and global economic uncertainty. The general market performance has not helped much either, as most altcoins have failed to hold an upside momentum. Ethereum, one of the most valuable assets in the cryptocurrency market, has dipped by nearly 3% in the past week and more than 5% in the month to date.

Fundamental Analysis

Ethereum price has been on a consistent bearish trajectory over the past few weeks against the backdrop of a dull crypto market and a stronger dollar. The dollar index, which measures the performance of the greenback against six major currencies, has been hovering around its highest level since December 2022 since Thursday. At press time, the dollar index was trading higher at 105.720. A stronger dollar tends to be bearish for risk assets, particularly cryptocurrencies.

Investors have been assessing the economic outlook, considering what could be next for interest rates and the economy, ahead of a string of key economic data due later this week. Investors will be looking at the data from the housing sector, as well as the CB Consumer Confidence data slated for Tuesday. Additionally, the quarterly GDP data for Q2 is expected to be published later Thursday, concurrently with the initial jobless claims.

The Fed’s favorite inflation gauge, the personal consumption expenditure index (PCE), is also expected to be published on Friday. Various Fed speakers are also due to give remarks and could provide fresh hints about the monetary policy outlook. Notably, Fed Chair Jerome Powell is slated to give a speech on Thursday.

Last week, the US Federal Reserve announced its decision to hold interest rates at its September policy meeting. Even so, Fed officials warned of further rate hikes later in the year, with markets pricing in a 25.5% chance of a 25-basis point hike to 5.75% in its November meeting.

Hope for Ethereum?

Ethereum price has not enjoyed favorable sentiment in recent weeks amid its struggling price and unstable on-chain performance. Even so, the latest on-chain data renews some hope for the asset’s price. On-chain analytics have always helped provide real-time analytics into crypto market trends.

According to data by Santiment, the Ethereum fees have dropped to their lowest levels since 2023, which might be a turning point for the asset’s market value and performance. As of Saturday 23^rd September, the Ethereum network fees had dropped to $1.15, a significant fall from huge levels seen in 2021 and 2022 of above $50.

Historically, such a decline in fees prompts a rise in utility and adoption as the asset becomes more affordable to circulate. Notably, increased utility and adoption could lead to a recovery in the asset’s market cap levels and value. Even so, this development does not seem to have a significant impact on the ETH price, as it continues to struggle to break out from the current selling pressure.

Ethereum Price Technical Analysis

The daily chart shows that the Ethereum price has been on a steep decline over the past few days, after facing a strong rejection at $1,620 level. During this period, the asset has been hovering slightly above the crucial support level of $1,565. The digital currency remains below the 50-day and 20-day exponential moving averages, as well as the 50-day and 100-day simple moving averages.

As such, the Ethereum price is likely to extend its losses into the ensuing sessions as bears take full control of the market. A drop below the immediate support level of $1,550.60 might push the ETH price lower to find support at $1,450. Conversely, a breakout above the 50-day EMA at $1,672 might pave the way for further increases.

ETH Price Chart