BTC Bulls Eye a Return to $17,000, with ETH Targeting $1,200

Key Insights:

• Bitcoin (BTC) and ethereum (ETH) joined the broader market in positive territory on Tuesday.
• News updates on FTX assets and the first day in bankruptcy court delivered support.
• This morning, investor sentiment remained bullish on the hope that FTX assets will reduce the impact of the FTX collapse on creditors.

Ethereum (ETH) rose by 2.89% on Tuesday. Reversing a 2.98% loss from Monday, ETH ended the day at $1,138. Notably, ETH visited sub-$1,100 for the fourth time since November 9.

A bearish morning saw ETH fall to a morning low of $1,073. Finding support at the First Major Support Level (S1) at $1,076, ETH rose to a high of $1,141. However, coming up against the First Major Resistance Level (R1) at $1,141, ETH eased back to end the day at sub-$1,140.

On Tuesday, bitcoin (BTC) rose by 2.87%. Partially reversing a 3.15% slide from Monday, BTC ended the day at $16,217. Notably, BTC fell to sub-$16,000 for the second consecutive session.

A mixed start to the day saw BTC fall to a mid-morning low of $15,616. Steering clear of the First Major Support Level (S1) at $15,400, BTC rose to an early afternoon high of $16,294. BTC broke through the First Major Resistance Level (R1) at $16,218 before falling back to sub-$16,050. However, finding late support, BTC retested R1 before easing back.

FTX news updates delivered crypto market support on Tuesday. Reports of FTX holding $1.24 billion in cash and market interest in acquiring FTX assets and stakes in other companies eased contagion risk.

Coupled with a real estate portfolio of around $300 million, the cash reserves and real estate portfolio would be sufficient to service the equivalent of FTX’s top ten creditors.

However, the identities of the creditors are unclear and may not be available for some time. On Tuesday, the Judge presiding over the FTX bankruptcy agreed to redact the identities of FTX clients.

Despite ongoing uncertainty over the value of assets and creditor identities, contagion risk eased further this morning. There was no negative news to weigh on investor sentiment.

With market conditions normalizing for a second session, the NASDAQ Composite Index may provide direction later today. US economic indicators and the FOMC meeting minutes will guide the NASDAQ. Key stats include private sector PMIs, jobless claims, consumer sentiment, and core durable goods orders.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 2.25% to $1,164. A bullish morning saw ETH rise from an early low of $1,126 to a high of $1,173. ETH broke through the First Major Resistance Level (R1) at $1,162.

Technical Indicators

ETH needs to hold above R1 and the $1,117 pivot to target the Second Major Resistance Level (R2) at $1,185 and $1,200. An ETH return to $1,180 would signal a bullish afternoon session. However, the crypto news wires and the NASDAQ Composite Index need to provide support.

In the event of an extended rally, ETH would likely test the Third Major Resistance Level (R3) at $1,253.

A fall through R1 and the pivot would bring the First Major Support Level (S1) at $1,094 into play. However, barring an extended afternoon sell-off, ETH should avoid sub-$1,050 and the Second Major Support Level (S2) at $1,049.

The third Major Support Level sits at $981. News of more crypto platforms freezing withdrawals would bring sub-$1,000 into play.

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 $1,185. The 50-day EMA slipped back from the 200-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

A move through R2 ($1,185) and the 50-day EMA ($1,185) would bring the 100-day EMA ($1,249) and R3 ($1,253) into play. However, failure to move through the 50-day EMA would put ETH under pressure.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 2.10% to $16,557. A bullish morning saw BTC rise from an early low of $16,168 to a high of $16,655. BTC broke through the First Major Resistance Level (R1) at $16,469.

Technical Indicators

BTC needs to hold above R1 and the $16,042 pivot to retarget the Second Major Resistance Level (R2) at $16,720. A move through the morning high of $16,655 would signal a bullish afternoon session. However, news updates will have to be market-friendly to support a breakout session.

In the event of an extended rally, BTC would likely test resistance at $17,000 and the Third Major Resistance Level (R3) at $17,398.

A fall through R1 and the pivot would bring the First Major Support Level (S1) at $15,791 into play. Barring another extended sell-off, BTC should avoid sub-$15,500 and the Second Major Support Level (S2) at $15,364. However, negative FTX-related news could send BTC to sub-$15,000.

The Third Major Support Level (S3) sits at $14,686.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat at the 50-day EMA, currently at $16,545. The 50-day EMA slipped back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A BTC breakout from the 50-day EMA ($16,545) would give the bulls a run at R2 ($16,720) and $17,000. However, a fall through the 50-day EMA ($16,545) would bring S1 ($15,791) into play.