Binance Announces Crypto Recovery Fund to Deliver ETH and BTC Rebounds

Key Insights:

• Bitcoin (BTC) and ethereum (ETH) saw red on Sunday, with ETH revisiting sub-$1,200 before ending the week at $1,219.
• FTX news updates and contagion fear continued to grip the crypto market on Sunday.
• However, sentiment shifted this morning on the news of Binance launching a recovery fund to shield the market from the anticipated fallout of the FTX collapse.

Ethereum (ETH) fell by 2.87% on Sunday. Following a 2.33% loss on Saturday, ETH ended the week down 22.3% to $1,219.

A bullish start to the day saw ETH rise to an early high of $1,272. Falling short of the First Major Resistance Level (R1) at $1,284, ETH slid to a low of $1,199. EHT fell through the First Major Support Level (S1) at $1,231 and briefly through the Second Major Support Level (S2) at $1,207.

On Sunday, bitcoin (BTC) fell by 2.80%. Following a 1.37% loss on Saturday, BTC ended the week down 21.9% to $16,345. Notably, BTC logged the seventh loss from eight sessions and ended the day at sub-$17,000 for the third time since 2020.

A bullish start to the day saw BTC rise to an early high of $16,956. Coming up short of the First Major Resistance Level (R1) at $17,068, BTC slid to a late low of $16,255. BTC fell through the First Major Support Level (S1) at $16,597 and the Second Major Support Level (S2) at $16,381 to end the day at $16,345.

FTX updates and contagion fear continued to weigh on BTC and ETH on Sunday. A lack of progress toward an FTX bailout added to the bearish sentiment.

Binance Announces the Launch of an Industry Recovery Fund

However, market conditions turned bullish this morning. Binance CEO CZ announced the launch of an industry recovery fund. CZ said,

“To reduce further cascading negative effects from FTX, Binance is forming an industry recovery fund, to help projects who are otherwise strong, but in a liquidity crisis. More details to come soon. In the meantime, please contact Binance labs if you think you qualify,”

CZ added,

“Also welcome other industry players with cash who wants to co-invest. Crypto is not going away. We are still here. Let’s rebuild.”

The crypto market responded favorably to the announcement, jumping by $41.6 billion in response to the news. A bearish morning had seen the crypto market tumble to a low of $757.9 billion before hitting a high of $799.5 billion.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 3.25% to $1,295. A mixed morning saw ETH fall to a low of $1,169 before rallying to a high of $1,259.

Technical Indicators

ETH needs to avoid the $1,230 pivot to retarget the First Major Resistance Level (R1) at $1,261. An ETH move through R1 would signal a bullish afternoon session. However, ETH moves through the afternoon session will depend on the details of the Binance recovery fund.

In the event of an extended rally, ETH would likely test the Second Major Resistance Level (R2) at $1,303 and resistance at $1,350. The Third Major Resistance Level (R3) sits at $1,376.

A fall through the pivot would bring the First Major Support Level (S1) at $1,188 back into play. However, barring another extended afternoon sell-off, ETH should avoid sub-$1,150. The Second Major Support Level (S2) at $1,157 should limit the downside.

The Third Major Support Level sits at $1,084.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 50-day EMA, currently at $1,328. The 50-day EMA slid back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A move through R1 ($1,261) would bring R2 ($1,303) and the 50-day EMA ($1,328) into play. However, failure to move through the 50-day EMA would leave ETH under pressure.

Bitcoin (BTC) Price Action

BTC was up 2.86% to $16,812. A mixed morning saw BTC fall to a low of $15,822 before rebounding to strike a high of $16,850.

BTC broke through the First Major Resistance Level (R1) at $16,782.

Technical Indicators

BTC needs to hold above R1 and the $16,519 pivot to target $17,000 and the Second Major Resistance Level (R2) at $17,220. A return to $17,000 would signal a bullish afternoon session. Further details of the Binance recovery fund would draw plenty of interest.

In the case of an extended rally, BTC would likely test resistance at $17,500. The Third Major Resistance Level (R3) sits at $17,921.

A fall through R1 and the pivot would bring the First Major Support Level (S1) at $16,081 back into play. Barring another extended sell-off, BTC should avoid sub-$15,500. The Second Major Support Level (S2) at $15,818 should limit the downside.

The Third Major Support Level (S3) sits at $15,117.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $17,866. The 50-day EMA slid back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A BTC move through R2 ($17,220) would give the bulls a run at the 50-day EMA ($17,866). However, BTC would need further details on the recovery fund to break down resistance at $17,500. Failure to move through the 50-day EMA would leave BTC under pressure and S1 ($16,081) in view.