US CPI number could trigger sell signal for Ethereum price and catalyse a 17% crash

• Ethereum price trades in a very small range near the monthly pivot.
• ETH has only one element that could help avoid a small meltdown.
• Expect the Tuesday US inflation number to be the catalyst either way.

Ethereum (ETH) price sees a pressure mountain around $1,490 with the monthly pivot for February under pressure. The bearish squeeze is becoming very clear now as lower highs are being formed, and price action is getting support for now from the monthly pivot. Should that pivot give way, a big area of roughly 17% could retreat with pride action slipping below $1,300.

Ethereum price could see this rally going back to square one

Ethereum price is thus not holding the best cards in this market's poker game where “the river” (the last card put on the table in Texas Hold 'em) will be the inflation number on Tuesday. Price action has been chopping between $1,554 and $1,490 and seems to be keeping the opportunity open for some upside potential. Expect Tuesday to be crucial in defining which path ETH will choose.

ETH will see a sell-off move should inflation be flat or jump higher. Although markets might still think that a drop looks granted, there is one thing traders should be aware of. Every ten years, the inflation basket and metrics are being tweaked to copy real inflation more accurately.

That tweaking already gives a bit more weight to some headline elements such as food, clothing and tech, all of which did not show any signs of cooling down and are even pointing to a higher valuation. The inflation number is then set to at least stay flat or marginally jump higher without considering the actual numbers. Expect a knee-jerk reaction with a knife-through-butter move at $1,440, where both the 55-day and the 200-day Simple Moving Averages (SMAs) reside before price action tanks further toward $1,243 near the low from February 2021.

ETH/USD daily chart

Any upside swing would arise if the inflation number decreases more than expected. Markets would readjust again and see this as a sign that the Federal Reserve has it wrong. Expect the shelved Goldilocks scenario back on the table if this is the case and see a bounce higher with a retest at $1,688 somewhere this week. 

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