ETH and a Look at $1,800 Shanghai Hard Fork Update Dependent

Key Insights:

• It was a mixed Saturday session for bitcoin (BTC) and ethereum (ETH), with ETH seeing a modest 0.12% decline.
• There were no Shanghai hard fork updates or crypto events to influence investor sentiment after an eventful Monday to Friday.
• ETH and BTC have had a mixed start to the Sunday session.

Ethereum (ETH) slipped by 0.12% on Saturday. Following a 3.42% gain on Friday, ETH ended the day at $1,692. ETH revisited $1,700 for a third consecutive session.

After a range-bound morning, ETH rose to a late afternoon high of $1,714 before hitting reverse. Coming up short of the First Major Resistance Level (R1) at $1,734, ETH fell to a late low of $1,680. Steering clear of the First Major Support Level (S1) at $1,642, ETH revisited $1,694 before easing back into the red.

On Saturday, bitcoin (BTC) rose by 0.21%. Consolidating a 4.48% rally from Friday, BTC ended the day at $24,633. Despite the bullish session, BTC fell short of the $25,000 handle for the first time in three sessions.

After a range-bound start to the day, BTC fell to a late-morning low of $24,450. Steering clear of the First Major Support Level (S1) at $23,614, BTC rose to a late afternoon high of $24,878. Coming up short of the First Major Resistance Level (R1) at $25,287, BTC eased back to end the day at $24,633.

Shanghai Hard Fork Update Silence Leaves ETH Flat Footed

On Saturday, there were no developer updates from testing the Shapella testnet. With the Shanghai hard fork expected to occur in March, no news was good news on Saturday. However, uncertainty toward the US crypto market regulatory landscape and Fed Fear likely pegged ETH and BTC back from another bullish session.

While US lawmaker scrutiny over SEC regulatory activity delivered support mid-week, anti-crypto sentiment remains evident on Capitol Hill in the wake of the FTX bankruptcy.

This week, Coinbase CEO Brian Armstrong called for greater clarity on crypto regulations, saying,

“America is losing its status as a financial hub long term, with no clear regs on crypto, and a hostile environment from regulators. Congress should act soon to pass clear legislation. Crypto is open to everyone in the world, and others are leading. The EU, the UK, and now HK.”

The Coinbase CEO shared the news of HK legalizing crypto trading from June 1 for all its citizens.

While progress toward Shanghai hard fork is ETH positive, the influence of the hard fork on ETH will likely depend upon the crypto market environment. A ramp-up in SEC regulation by enforcement and anti-crypto rhetoric on Capitol Hill would weigh on investor sentiment and staking intentions.

Following the SEC move against Kraken and crypto staking services, Ethereum staking experienced a sharp dip in daily staking inflows. In the days following the February 13 dip, staking inflows have been mixed.

According to CryptoQuant, daily ETH staking inflows fell to a February low of 4,896 ETH (13/02/23) before recovering. On February 14, inflows hit a February high of 33,280 EHT before falling to 16,640 on Friday and 11,520 on Saturday.

Investors will likely want to see the upward trend resume next week to support further ETH price gains.

The Day Ahead

Investors should monitor the crypto news wires for SEC v Ripple, FTX, Genesis, and Silvergate Bank updates. However, SEC activity and US lawmaker chatter will likely remain the focal points for investors.

For Ethereum, developer updates from testing the Shapella testnet will influence. Reports of bugs or a possible delay to the anticipated Shanghai hard fork in March would be ETH price negative.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.18% to $1,695. A mixed morning saw ETH fall to an early low of $1,690 before rising to a high of $1,710. The First Major Resistance Level (R1) at $1,711 capped the upside.

Technical Indicators

ETH needs to avoid a fall through the $1,695 pivot to retarget the First Major Resistance Level (R1) at $1,711 and the Saturday high of $1,714. A move through R1 would signal a breakout session. However, Shanghai hard fork updates and the crypto news wires should be ETH-friendly to support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,729 and resistance at $1,750. The Third Major Resistance Level (R3) sits at $1,763.

A fall through the pivot would bring the First Major Support Level (S1) at $1,677 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,650. The Second Major Support Level (S2) at $1,661 should limit the downside. The Third Major Support Level (S3) sits at $1,627.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. Ethereum sat above the 50-day EMA, currently at $1,632. The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the Major Support Levels and the 50-day EMA ($1,632) would support a breakout from R1 ($1,711) to target R2 ($1,729) and $1,750. However, a fall through S1 ($1,677) would give the bears a run at S2 ($1,661) and the 50-day ($1,632). A fall through the 50-day EMA would send a bearish signal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.04% to $24,624. A mixed morning saw BTC rise to an early high of $24,839 before easing back.

Technical Indicators

BTC needs to move through the $24,654 pivot to target the First Major Resistance Level (R1) at $24,857. However, a return to $25,000 would signal a breakout session. The crypto news wires need to be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $25,082 and the Thursday high of $25,234. The Third Major Resistance Level (R3) sits at $25,510.

Failure to move through the pivot would leave the First Major Support Level (S1) at $24,429 in play. However, barring a crypto event-fueled crypto sell-off, BTC should avoid sub-$24,000. The Second Major Support Level (S2) at $24,226 should limit the downside.

The Third Major Support Level (S3) sits at $23,798.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA ($23,498). The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the Major Support Levels and the 50-day EMA ($23,498) would support a breakout from R1 ($24,857) to target R2 ($25,082). However, a fall through S1 ($24,429) would give the bears a run at S2 ($24,226). Barring a crypto event, BTC should avoid the 50-day EMA ($23,498).