Understanding ETH's Price Pressure: When Will the Recovery Window Open?

The Macro Factor Behind Recent Pullbacks

Last week’s initial jobless claims data (August 9) sent shockwaves through crypto markets, and ETH was no exception. The labor market report revealed 226,000 initial claims—lower than forecasts—signaling robust employment conditions. Simultaneously, July’s Producer Price Index (PPI) data painted a concerning picture: annual inflation at 3.3% and monthly at 0.9%, both pointing to persistent upstream cost pressures. This combination effectively neutralized market speculation about imminent Federal Reserve rate cuts. When employment remains strong while inflation persists, the Fed’s inclination to maintain elevated rates becomes clearer, and crypto assets—highly sensitive to liquidity flows—immediately respond. Capital redirects toward traditional safe havens like US Treasuries and the dollar, placing ETH and similar risk assets under selling pressure.

Technical Landscape: Where Are the Real Support Levels?

Examining the ETH/USDT 1-hour timeframe reveals a market caught between resistance and support. Price action previously rallied near $4794 (a marked resistance zone) before encountering selling pressure and retreating. The current technical setup shows the moving average structure offering substantial overhead resistance, while the $4529.55 level has emerged as a critical short-term support floor. Should this level capitulate, Fibonacci retracement targets in the 38.2% range (approximately $4450-$4500) would next challenge buyers. The MACD indicator’s behavior—with DIF and DEA lines crossing and histogram bars oscillating between red and green—reflects genuine uncertainty: bulls and bears remain locked in struggle, though the current candle setup favors bearish momentum. Volume patterns and candlestick formations now carry outsized importance in determining whether this support region can be defended.

Liquidity Expectations Shape Market Sentiment

The broader market context deserves emphasis. Strong employment data combined with elevated PPI readings have cooled expectations for monetary easing. This tightening liquidity environment affects all risk assets, not only crypto. Current market dynamics suggest sustained pressure on assets lacking traditional backing. For ETH holders nursing losses above the $4700 entry point, averaging down immediately presents unnecessary risk—patience for clearer stabilization signals would be prudent. Confirmation of support holding (evidenced by long lower shadows, bullish engulfing patterns, or volume expansion) should precede fresh accumulation.

Strategic Considerations Going Forward

The path forward hinges on two scenarios. Should $4529.55 hold under test and stabilization signals emerge—perhaps a bullish reversal pattern on the hourly timeframe paired with improving volume—selective re-entry becomes justified. Conversely, a decisive break below this support would warrant position reduction to limit downside exposure. This current environment exemplifies how macro data ripples through crypto markets unpredictably; digestion periods are rarely immediate. Rather than rushing into bottom-fishing, disciplined participants should await clear confirmation that capitulation has ended. Market stabilization—not wishful thinking—should guide entry decisions, protecting capital from becoming trapped in lingering downtrends.