ETH and a Return to $1,650 in the Hands of US Corporate Earnings

Key Insights:

• It was a bearish Tuesday for bitcoin (BTC) and ethereum (ETH), with the ETH ending the day at sub-$1,600 for the first time in five sessions.
• Binance news and a bearish NASDAQ Composite Index led to a broad-based crypto pullback.
• However, it was a bullish start to the Wednesday session.

Ethereum (ETH) slid by 4.36% on Tuesday. Following a 0.06% decline on Monday, ETH ended the day at $1,556. ETH ended the day at sub-$1,600 for the first time in five sessions.

A bullish start to the day saw ETH rise to an early high of $1,642. Coming up short of the First Major Resistance Level (R1) at $1,656, ETH slid to a late low of $1,529. ETH fell through the First Major Support Level (S1) at $1,591 and briefly through the Second Major Support Level (S2) at $1,555 before ending the day at $1,556.

On Tuesday, bitcoin (BTC) slid by 1.24%. Reversing a 0.87% gain from Monday, BTC ended the day at $22,627. Notably, BTC revisited $23,000 for the fourth consecutive session.

A bullish start to the day saw BTC rise to an early high of $23,154. Coming up short of the First Major Resistance Level (R1) at $23,220, BTC slid to a final-hour low of $22,437. BTC briefly fell through the First Major Support Level (S1) at $22,548 before ending the day at $22,627.

The NASDAQ Composite Index and Binance Weigh on Investor Sentiment

Market sentiment toward an FTX revival and smooth Genesis bankruptcy proceedings failed to deliver support on Tuesday.

News of Binance commingling customer funds with reserve funds in a single wallet weighed on market sentiment. While Binance was addressing the issue, investor sensitivity to negative news led to a sharp pullback, with regulatory risk also a headwind for investors to consider.

US economic indicators and the NASDAQ Index added to the bearish mood, with the US private sector continuing to contract in January.

Today, investors need to continue monitoring Genesis and FTX news updates, with Shanghai hard fork chatter also needing consideration. In the afternoon session, US corporate earnings will also provide direction. Boeing (BA), IBM (IBM), and Tesla (TSLA) are among the big names releasing earnings results today.

We expect the earnings results and outlooks to influence riskier assets.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.05% to $1,557. A choppy start to the day saw ETH slide to an early low of $1,514 before rising to a high of $1,559.

Technical Indicators

ETH needs to move through the $1,576 pivot to target the First Major Resistance Level (R1) at $1,622 and the Tuesday high of $1,642. A return to $1,620 would signal a breakout session. However, the crypto news wires will have to be crypto-friendly to support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,689 and resistance at $1,700. The Third Major Resistance Level (R3) sits at $1,802.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,509 in play. However, barring another broad-based crypto market sell-off, ETH should avoid the Second Major Support Level (S2) at $1,463. The Third Major Support Level (S3) sits at $1,350.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. Ethereum sat above the 100-day EMA, currently at $1,516. The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA widened from the 200-day EMA, delivering mixed signals.

A move through the 50-day EMA ($1,583) would support a breakout from R1 ($1,622) to target R2 ($1,689) and $1,700. However, a fall through the 100-day EMA ($1,516) and S1 ($1,509) would give the bears a run at S2 ($1,463). A move through the 50-day EMA would signal a bullish move.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.46% to $22,732. A mixed start to the day saw BTC fall to an early low of $22,324 before rising to a high of $22,761. The First Major Support Level (S1) at $22,325 delivered early support.

Technical Indicators

BTC needs to move through the $22,739 pivot to target the First Major Resistance Level (R1) at $23,042 and the Tuesday high of $23,154. A return to $23,000 would support a bullish session. However, the crypto news wires should be market-friendly to deliver a breakout.

In the event of another extended rally, BTC would likely test the Second Major Resistance Level (R2) at $23,456 and resistance at $23,500. The Third Major Resistance Level (R3) sits at $24,173.

Failure to move through the pivot would leave the First Major Support Level (S1) at $22,325 in play. Barring a broad-based crypto sell-off, BTC should avoid sub-$22,000. The Second Major Support Level (S2) at $22,022 should limit the downside. The Third Major Support Level (S3) sits at $21,305.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA, currently at $22,006. The 50-day EMA pulled further away from the 200-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 ($22,006) would support a breakout from R1 ($23,042) to target R2 ($23,456) and $23,500. However, a fall through S1 ($22,325) would give the bears a run at S2 ($22,022) and the 50-day EMA ($22,006). A fall through the 50-day EMA would signal a shift in sentiment.