Ethereum has come under pressure this week as macroeconomic headwinds outweighed the absence of any major cryptocurrency-specific catalysts, though renewed hopes for progress between the United States and Iran have helped limit the downside. With no crypto-native news to trade on, Ethereum has been behaving as a macro-sensitive risk asset, with rate expectations and dollar strength setting the tone for the wider sector.

A sharp decline in oil prices ahead of the UN General Assembly had fostered positive risk sentiment, supporting the cryptocurrency market as concerns over inflation and further rate hikes eased.

That supportive backdrop faded after Trump poured cold water on expectations of an earlier end to the Iran war, repeating that the US would make a deal with Tehran after the November elections. Oil prices, Treasury yields and the US dollar began rising again following his remarks, weighing on risk assets such as cryptocurrencies.

Optimism returned yesterday, however, on news that Iran has put an offer on the table, promising to reopen the Strait of Hormuz within seven days if the US meets its terms. The strait is a critical chokepoint for global oil trade, which is why its status moves crude prices and, through them, the inflation and rate-hike expectations that have been steering crypto sentiment this week. Iran's Foreign Minister Araghchi is staying in New York over the weekend to await a US response.

According to the analysis, a breakthrough would be positive for Ethereum, as aggressive rate hike bets would likely be pared back if inflation concerns ease. A prolongedmate, or even a re-escalation, would likely keep pressure on the crypto market through tightening financial conditions.

Ethereum Technical Analysis - Daily Timeframe

On the daily chart, Ethereum has been pulling back over the past few days as macro conditions turned negative. A major upward trendline runs around the 2,560 support, making that technical zone particularly strong. Per the analysis, a pullback into the support could see buyers step in with defined risk placed below the trendline to position for a rally into the 3,000 level. Sellers, on the other hand, would want the price to break below the trendline to pile in for a drop into the 2,360 level next.

Ethereum Technical Analysis - 4 Hour Timeframe

On the 4-hour chart, bearish momentum increased as sellers piled in following the break below the upward trendline that had been defining the bullish momentum. From a risk management perspective, buyers have a better risk-to-reward setup around the support and the major trendline to keep targeting new highs, while sellers will look for a break below it to extend the correction into the 2,360 level.

Ethereum Technical Analysis - 1 Hour Timeframe

On the 1-hour chart, a minor resistance zone sits around the 2,710 level. Sellers will likely step in there with defined risk above the resistance to keep pushing price toward the 2,560 support, while buyers will want to see the price break higher to pile in for a rally into new highs.

Upcoming Catalysts

There is nothing on the economic agenda today, but traders will keep a close eye on US-Iran developments after yesterday's proposal to reopen the Strait of Hormuz under certain conditions. With Araghchi waiting in New York over the weekend, any US response to the offer — or the absence of one — will be the key detail to monitor.

This article is based on fundamental and technical commentary originally published on InvestingLive.