Renewed Middle East Pressures Push Ethereum Lower; Traders Await Data

Renewed Middle East tensions put Ethereum under renewed selling pressure, hurting risk sentiment. The pullback started late yesterday after reports that the US military is cutting its troop presence across bases in the region and the State Department is slashing staff at diplomatic posts because of rising security risks and the chance of renewed military action against Iran.

Selling pressure grew after The New York Times reported that the US and Israeli military have drawn up detailed plans for potential strikes on Iran after the US midterm elections. The report added that the US is building up its forces, including three aircraft carriers, thousands of Marines, fighter jets and special operations units, which are expected to be fully deployed by early November.

The outlook for another direct conflict, combined with lingering growth worries and a hawkish Federal Reserve, act as significant bearish forces for crypto. Tomorrow’s US Flash PMIs could serve as another catalyst given the persistent economic growth concerns.

If the data comes in weaker than expected, growth fears could deepen, risk sentiment could worsen, and Ethereum could face a sell-off. Conversely, strong data could ease fears of an economic slowdown and bring a short-term relief rally, but it would not change the broader picture, as it would only reinforce the need for interest rate hikes.

Ethereum Technical Analysis – Daily Timeframe

Ethereum is edging lower after the unrest in the Middle East. If the price pulls back to the major trendline and the 2,360 support, buyers are expected to step in, with a defined risk below the trendline, to position for a rally to 3,400. Sellers, on the other hand, want to see the price break below the trendline, opening the door to new lows and targeting 1,900 next.

Ethereum Technical Analysis – 4 Hour Timeframe

The price is breaking below the minor upward trendline that had defined the recent bullish momentum. On the break, sellers are likely to pile in with a defined risk above the trendline, extending the pullback into the major trendline. Buyers are better off waiting for the price to fall into the major trendline for a better risk-to-reward setup.

Ethereum Technical Analysis – 1 Hour Timeframe

There is a minor downward trendline that could act as resistance if a slight pullback occurs. Sellers will likely continue to lean on that trendline with a defined risk above it, pushing into new lows. Some aggressive buyers might wait for a break higher to start positioning for a rally to 2,577 next.

Upcoming Catalysts

The latest US Jobless Claims figures are due today, and tomorrow concludes the week with the US Flash PMIs.