- Ethereum price has been in a tight range in the past few days.
- Fear and greed index has crashed to extreme fear level.
Ethereum price has been in a consolidation mode in the past few days as the fear and greed index plunged to the lowest level in weeks. ETH was trading at $1,300, which is slightly above last month’s low of $1,223. It has plunged by more than 70% from the highest level this year, giving it a market cap of more than $160 billion.
Fear and greed index plummets
Ethereum price has been in a consolidation phase recently even as fear among investors escalated. According to CNN, the closely watched fear and greed index plunged to a low of 19, which was the lowest level in more than a month. It was trading at 47 in the same time a month ago.
Data shows that momentum in the stock market has fallen to the extreme fear zone. Similarly, stock price strength, stock price breadth, put and call options have all moved to extreme fear level. The same is true with the junk bond demand and market volatility.
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CNN Money’s fear and greed index is mostly focused on the stock market. Still, it is a good measure to gauge the sentiment in the financial market. Meanwhile, Bitcoin’s fear and greed index has fallen to 20, meaning that it is also in extreme fear. Historically, financial assets tend to fall when there is substantial fear in the market.
The biggest fear in the market is about stagflation amid high-interest rates. The Federal Reserve has hiked interest rates by 300 basis points in 2022 and started to reduce its balance sheet through its quantitative tightening policy. Therefore, the upcoming FOMC minutes and US inflation data will provide hints about how high the Fed will hike.
Ethereum price has also staggered as investors assess its performance now that it has become a proof-of-stake (PoS) network.
Ethereum price prediction
The daily chart shows that ETH price has been in a consolidation phase in the past few days. In this period, the coin has remained between the important support and resistance levels at $1,223 and $1,420. It has also moved below the 25-day and 50-day moving averages.
The MACD has moved below the neutral point and is going sideways. Therefore, this consolidation is likely a calm before the storm. As such, there is a likelihood that the coin will have a bearish breakdown as sellers target the next support at $1,000. The alternative is where Ethereum price bounces back and reaches the resistance at $1,500.
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