BTC and ETH Face Top Side Resistance Ahead of US Private Sector PMIs

Key Insights:

• Bitcoin (BTC) and Ethereum (ETH) have had a mixed morning session in spite of Monday’s late recovery.
• Investor apprehension ahead of US private sector PMI numbers has halted any breakouts.
• Bearish technical indicators signal a BTC test of support at $20,000 while ETH continues to face the threat of sub-$1,500.

On Monday, bitcoin (BTC) fell by 0.55%. Partially reversing a 1.76% gain from Sunday, BTC ended the day at $21,395. A late recovery reduced the BTC deficit, with BTC bouncing back from a final hour low of $21,162.

The choppy session saw BTC fall through the First Major Support Level (S1) at $21,121 before the partial recovery.

Ethereum (ETH) fared better, rising by 0.43%. ETH fell through the First Major Support Level (S1) at $1,571 to test the Second Major Support Level (S2) at $1,524 with a day low of $1,529. A final hour rebound saw ETH rise from a low of $1,586 to wrap up the day in positive territory.

BTC and ETH were under the influence of the NASDAQ 100 until the US closing bell. The recovery came despite lingering fears of a hawkish Fed Chair Powell and uncertainty about a string of US economic indicators due out this week.

Later today, US prelim private sector PMIs for August will draw plenty of interest. With the services sector accounting for 70% of the US economy, a rebound in service sector activity could fuel fears of a more hawkish Fed move in September.

Contrastingly, weaker numbers would raise concerns over the US economic outlook. Both scenarios are crypto-price negative.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.07% to $21,409. A mixed start to the day saw BTC fall to a low of $20,908 before rising to a high of $21,558.

BTC briefly fell through the First Major Support Level (S1) at $21,023.

Technical Indicators

BTC needs to avoid the $21,280 pivot to target the First Major Resistance Level (R1) at $21,652

BTC would need a bullish morning session to support a breakout from the morning high of $21,558.

An extended crypto rally would see BTC test the Second Major Resistance Level (R2) at $21,909 and resistance at $22,000. The Third Major Resistance Level (R3) sits at $22,538.

A fall through the pivot would bring the First Major Support Level (S1) at $21,023 back into play. Barring another extended sell-off, BTC should steer clear of sub-$20,500. The Second Major Support Level at $20,651 should limit the downside. The Third Major Support Level (S3) sits at $20,022.

Today’s US private sector PMI numbers will influence. Weak service sector PMI figures would bring S3 into play. From a market perspective, the Fed will likely plough ahead with rate hikes irrespective of the economic environment.

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 $22,176.

Following Monday’s bearish cross, the 100-day EMA pulled back from the 200-day EMA, with the 50-day EMA sliding back from the 200-day EMA, delivering bearish price signals.

A further pullback of the 50-day EMA from the 200-day EMA would bring sub-$20,000 into play.

For the bulls, a BTC move through R1 ($21,652) and R2 ($21,909) would bring the 50-day EMA ($22,176) into view.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 1.04% to $1,608. Tracking the broader market, ETH rose to a high of $1,639 before falling to a low of $1,563.

ETH came in the range of the First Major Support Level (S1) at $1,559 before returning to $1,608.

Technical Indicators

ETH needs to hold above the $1,595 pivot to target the First Major Resistance Level (R1) at $1,660.

However, a material shift in market risk appetite is needed to support an ETH breakout from the morning high of $1,639. In the case of an event-driven broad-based crypto rebound, ETH will likely test the Second Major Resistance Level (R2) at $1,696 and resistance at $1,700.

The Third Major Resistance Level (R3) sits at $1,797.

A fall through the pivot would bring the First Major Support Level (S1) at $1,559 back into play. Another sell-off could see ETH test support at $1,500 and the Second Major Support Level (S2) at $1,494. However, ETH should steer clear of sub-$1,400 and the Third Major Support Level (S3) at $1,393.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 200-day EMA, currently at $1,676 this morning.

Following a bearish cross of the 50-day EMA through the 100-day EMA, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA narrowed to the 200-day EMA to also deliver a bearish signal.

An ETH move through R1 ($1,660) would support a run at the 200-day EMA ($1,676) to bring R2 ($1,696) and the 50-day EMA ($1,702) into view.

However, a pullback from the 200-day EMA would bring S1 (1,559) and $1,500 support into play.