Focus on the Federal Reserve
Following Ethereum’s transition from a proof-of-work (PoW) to a proof-of-stake (PoS) mechanism on September 15, 2022, Ethereum Proof of Work (ETHW) emerged as a distinct PoW blockchain forked from Ethereum’s Merge.
ETHW essentially preserves the pre-Merge Ethereum, aiming to sustain PoW mining for ETH miners who might otherwise face financial difficulties under the staking model. On the other hand, PoS is less energy-intensive and enables networks to scale at a lower cost. However, it remains uncertain whether PoS will fully eliminate PoW mining.
ETHW’s Development Challenges
Ethereum Proof of Work is still in its infancy, and users have already encountered accessibility issues. The chain ID used by ETHW (10001) conflicted with a Bitcoin Cash testnet, causing problems for MetaMask wallet users. Despite this oversight, major crypto exchanges like Binance and Coinbase have supported ETHW.
ETHW’s price has fallen sharply, reflecting the broader crypto market’s challenges amid unfavorable macroeconomic conditions. Economists warn of a potential global recession as central banks, including the U.S. Federal Reserve, adopt aggressive measures to combat inflation.
Monitoring Key Price Levels
Investors are hopeful that the Federal Reserve may adopt a less aggressive stance. However, analysts predict a high likelihood of a 75 basis-point rate hike. Currency strategist Rodrigo Catril from National Australia Bank stated:
“An additional Fed rate hike is expected, potentially impacting the crypto market. While the Fed may signal a slower pace of hikes, the message will remain that inflation control is unfinished.”
In deze context, ETHW may struggle to maintain current price levels. Billionaire Ray Dalio predicts tough financial market conditions for the next five years, which could also apply to cryptocurrencies. Conversely, any signals from the Fed hinting at a slower rate hike pace might trigger a crypto rally.
Technical Analysis of Ethereum Proof of Work (ETHW)
ETHW has been on a steep downtrend since mid-September, dropping from $27.87 to $3.89 before stabilizing at $6.49. Unless the price climbs above $12, the bearish trend is likely to persist, keeping ETHW in the SELL-ZONE.
Critical Support & Resistance for ETHW
Key resistance levels for ETHW are at $10 and $12. If the price breaks above $10, the next target could be $12. However, the current support level is $6, and a drop below this would signal a further decline to $5.5 or even $3.5 if $4 fails to hold.
Drivers for ETHW Price Growth
Although overall market sentiment remains bearish, any indications of future policy easing by the Federal Reserve could boost ETHW prices. A rise above $10 could set the stage for a move toward $12, signaling potential recovery.
Signs of Further Declines for ETHW
ETHW’s price is still over 85% below its all-time high, with bearish market sentiment and weak demand contributing to its struggles. A break below the $6 support level could accelerate the decline, targeting $5.5 or $3.5 if bearish pressures persist.
Meningen van deskundigen en analisten
Investors anticipate another Fed rate hike, but the focus is on whether Chair Jerome Powell will hint at easing aggressive policy measures. ETHW could rise if the Fed signals a slower pace of hikes. However, Galaxy Digital CEO Mike Novogratz cautions that significant crypto gains are unlikely until the Fed shifts from a hawkish stance to easing monetary policy.
