BTC and ETH See Red Ahead of US Stats and the Jackson Hole Meet

Key Insights:

• Bitcoin (BTC) and Ethereum (ETH) have been under pressure this morning, 
• The initial market reaction to Tuesday’s US private sector PMI numbers was positive. However, the figures highlighted the growing risk of a US economic recession.
• Technical indicators remain bearish, signaling a BTC fall to sub-$21,000 and an ETH look at sub-$1,500.

On Tuesday, bitcoin (BTC) rose by 0.57%. Reversing a 0.55% loss from Monday, BTC ended the day at $21,519. BTC recovered from a low of $20,908, supported by disappointing US private sector PMIs.

Ethereum (ETH) followed a similar trend, bouncing back from a morning low of $1,563 to end the day up 2.52% to $1,666.

BTC and ETH remained under the influence of the NASDAQ 100, which ended the day flat.

Today, the market attention shifts to US core durable goods and durable goods orders. Following Tuesday’s PMIs, another weak set of numbers will further fuel fears of a US economic recession.

For the US, the threat of a lengthy recession, plagued by a persistent inflationary environment and a Fed determined to bring inflation to target, would be market negative.

From Jackson Hole, Wyoming, any initial comments from central bankers will also need considering. Dovish chatter and optimism towards the economic outlook and curbing inflation would be crypto-friendly.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.60% to $21,390. A mixed start to the day saw BTC rise to a high of $21,557 before falling to a low of $21,157.

Technical Indicators

BTC needs to avoid the $21,371 pivot to target the First Major Resistance Level (R1) at $21,833.

BTC would need a bullish afternoon session to support a breakout from the Tuesday high of $21,685. An extended crypto rally would see BTC test resistance at $22,000 and the Second Major Resistance Level (R2) at $22,148.

The Third Major Resistance Level (R3) sits at $22,925.

A fall through the pivot would bring the First Major Support Level (S1) at $21,056 back into play. Barring another extended sell-off, BTC should steer clear of sub-$20,500. The Second Major Support Level at $20,594 should limit the downside.

The Third Major Support Level (S3) sits at $19,817.

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 $22,014.

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 S1 ($21,056) and sub-$21,000 into play.

For the bulls, a BTC move through R1 ($21,833) would bring the 50-day EMA ($22,014) and R2 ($22,148) into view.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 1.73% to $1,637. Tracking the broader market, ETH rose to a high of $1,667 before falling to a low of $1,605.

Technical Indicators

ETH needs to hold above the $1,634 pivot to target the First Major Resistance Level (R1) at $1,706.

However, a material shift in market risk appetite is needed to support an ETH breakout from the Tuesday high of $1,674. In the case of an event-driven broad-based crypto rebound, ETH will likely test the Second Major Resistance Level (R2) at $1,745 and resistance at $1,750.

The Third Major Resistance Level (R3) sits at $1,856.

A fall through the pivot would bring the First Major Support Level (S1) at $1,595 into play. Another sell-off could see ETH test the Second Major Support Level (S2) at $1,523 and support at $1,500.

However, ETH should steer clear of sub-$1,500 and the Third Major Support Level (S3) at $1,412.

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 $1,674.

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 50-day EMA and the 100-day EMA narrowed to the 200-day EMA to deliver bearish signals.

An ETH move through the 200-day EMA ($1,674) and the 50-day EMA ($1,689) would bring R1 ($1,706) and the 100-day EMA ($1,719) into view.

However, a bearish cross of the 50-day EMA through the 200-day EMA would bring sub-$1,500 into play.