ETH and a Return to $1,350 Sits in the Hands of US PMIs and the Fed

Key Insights:

• Bitcoin (BTC) and ethereum (ETH) shared a bearish weekend, leaving BTC and ETH at sub-$20,000 and sub-$1,300, respectively.
• Investor sentiment toward Fed monetary policy and the economic outlook weighed on the crypto market, which fell for a third consecutive session.
• The technical indicators remain bearish, supporting a return to 2022 lows.

On Sunday, bitcoin (BTC) declined by 1.29%. Following a 0.59% fall on Saturday, BTC ended the week up 1.33% to $19,067.

A mixed start to the session saw BTC climb to a late morning high of $19,396. Coming up short of the First Major Resistance Level (R1) at $19,482, BTC slid to a final hour low of $18,943.

BTC fell through the First Major Support Level (S1) at $19,154 and the Second Major Support Level (S2) at $18,991 before a partial recovery to $19,067.

Ethereum (ETH) slid by 2.67% on Sunday. Following a 1.28% fall on Saturday, ETH ended the week down 1.36% to $1,277.

Tracking the broader market, ETH rose to a mid-morning high of $1,318. Coming up short of the First Major Resistance Level (R1) at $1,306, ETH slid to a late low of $1,270. ETH fell through the First Major Support Level (S1) at $1,299 and the Second Major Support Level (S2) at $1,285 to end the day at $1,277.

Market angst over the US inflation figures from Friday and the likely impact of Fed monetary policy on the economic outlook weighed. In response, the crypto market joined the US equity markets in the red, while BTC avoided the red on Friday. However, the weekend was bearish for the pair.

In Sunday’s final hour (UTC), the NASDAQ Mini sent BTC and ETH to session lows. However, recovering from the deep red, the NASDAQ Mini was down just 35.75 points this morning, with the Dow Mini and S&P Mini in positive territory ahead of the US opening bell.

US Economic Indicators and the Fed in the Spotlight

Later today, US economic indicators and the Fed will likely provide BTC and ETH direction. Crypto market sensitivity to US economic indicators has been on the rise. The all-important ISM Manufacturing PMI will draw interest following weak PMI numbers from the Eurozone.

Investors will also need to track FOMC member chatter and any commentary from the Fed Board of Governors’ emergency meeting.

While the markets remain split between a 75-basis point and 50-basis point November rate hike, talk of a percentage point move would send BTC and ETH into the red. This morning, the CME Group has the probability of a 75-basis point hike at 58.0% and a 50-basis point hike at 42.0%.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.48% to $19,159. A mixed morning saw BTC slide to an early low of $18,980 before rising to a high of $19,330.

BTC tested the First Major Resistance Level (R1) at $19,328 before easing back.

Technical Indicators

BTC needs to avoid the $19,135 pivot to retarget the First Major Resistance Level (R1) at $19,328 and the Sunday high of $19,396. A BTC move through the Sunday high of $19,396 would signal a bullish session.

In the case of an extended rally, BTC should test the Second Major Resistance Level (R2) at $19,588 and target the Third Major Resistance Level (R3) at $20,041.

A fall through the pivot would bring the First Major Support Level (S1) at $18,875 into play. Barring an extended sell-off, BTC should avoid sub-$18,500. The Second Major Support Level (S2) at $18,682 will likely limit the downside.

The Third Major Support Level (S3) sits at $18,229.

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 $19,314.

The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish price signals.

A move through the 50-day EMA ($19,314) and R1 ($19,328) would give the bulls a run at the 100-day EMA ($19,459) and R2 ($19,588). The 200-day EMA sits at $19,906. However, a failure to move through the 50-day EMA ($19,314) would give the bears a run at the Major Support Levels.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 1.20% to $1,292. A choppy morning saw ETH fall to an early low of $1,263 before rising to a high of $1,302.

ETH came within the range of the First Major Support Level (S1) at $1,259 before recovering.

Technical Indicators

ETH needs to avoid the $1,288 pivot to retarget the First Major Resistance Level (R1) at $1,307 and the Sunday high of $1,318. US economic indicators and Fed chatter will influence later today.

In the event of an extended rally, ETH could test the Second Major Resistance Level (R2) at $1,336 and resistance at $1,350. The Third Major Resistance Level (R3) sits at $1,384.

A fall through the pivot would bring the First Major Support Level (S1) at $1,259 into play. Barring an extended US session sell-off, ETH should avoid sub-$1,250 and the Second Major Support Level (S2) at $1,240.

The Third Major Support Level (S3) sits at $1,192.

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 $1,324. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

An ETH breakout from R1 ($1,307) would give the bulls a run at the 50-day EMA ($1,324) and R2 ($1,336). However, failure to move through the 50-day EMA would leave ETH under pressure near-term.