Ethereum faces key trendline test ahead of geopolitical risks
Ethereum is holding near $1,850 despite continued inflows into spot ETFs. However, escalating tensions between the United States and Iran, rising oil prices, and the upcoming Federal Reserve meeting are increasing risks for the broader cryptocurrency market.
Ethereum continues to receive support from institutional investors. According to SoSoValue, U.S. spot Ethereum ETFs attracted $105.4 million in net inflows between July 13 and July 17. However, this has not yet been enough to trigger a sustained rally in ETH.
At the moment, geopolitical and macroeconomic risks are having a greater impact on the cryptocurrency market than ETF flows. The United States and Iran continue to exchange strikes, while the Strait of Hormuz remains closed.
Against this backdrop, Brent crude has climbed above $90 per barrel. A further rise in oil prices could increase inflationary pressure and strengthen the case for tighter monetary policy.
These risks are particularly important ahead of the Federal Reserve's July 28–29 meeting, with the interest rate decision scheduled for July 29.
Ethereum tests ascending trendline near $1,850
As highlighted previously, Ethereum is once again testing the ascending trendline that coincides with key support around $1,850. The market's reaction to this area is likely to determine ETH's short-term direction.
A decisive break and close below $1,850 would weaken the current technical structure and open the way toward the 50-day simple moving average (SMA) near $1,735. If selling pressure persists, the next downside target would be $1,650.
Conversely, if buyers successfully defend the ascending trendline, the probability of another attempt to test the psychological $2,000 resistance level will increase.
Ethereum faces macro risks despite ETF inflows
The $105.4 million in net inflows into U.S. spot Ethereum ETFs continues to support the long-term fundamental outlook, but for now it reflects only a moderate recovery in institutional demand.
Ethereum's next move is likely to depend on developments in the U.S.–Iran conflict, the Federal Reserve's interest rate decision, and Bitcoin's price action.
Despite outperforming Bitcoin over the past several weeks, Ethereum continues to maintain a strong positive correlation with the leading cryptocurrency.
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