ETH and BTC Find Support, with a BTC Return To $17,000 a Bullish Signal
Key Insights:
- Bitcoin (BTC) and ethereum (ETH) saw diverging trends on Thursday, with ETH seeing red for the fifth time in seven sessions.
- Bearish market sentiment left ETH on the back foot as investors responded to more FTX contagion news.
- This morning, sentiment improved despite lingering contagion risk as investors look to move on from the demise of FTX.
Ethereum (ETH) fell by 1.32% on Thursday. Following a 2.96% slide on Wednesday, ETH ended the day at $1,199. Notably, ETH wrapped up the day at sub-$1,200 for the first time since November 9.
A bullish start to the day saw ETH rise to an early high of $1,227. Coming up short of the First Major Resistance Level (R1) at $1,260, ETH slid to a late morning low of $1,181. However, steering clear of the First Major Support Level (S1) at $1,178, ETH revisited $1,217 before falling back into the red.
On Thursday, bitcoin (BTC) rose by 0.17%. Partially reversing a 1.37% loss from Wednesday, BTC ended the day at $16,683. Notably, BTC logged the fourth gain from twelve sessions while falling short of $17,000 for the second time since 2020.
A bullish start to the day saw BTC rise to an early high of $16,735. BTC broke through the First Major Resistance Level (R1) at $16,988 before falling to an early afternoon low of $16,410. Steering clear of the First Major Support Level (S1) at $16,33, BTC found late support to wrap up the day in positive territory.
On Thursday, FTX fallout continued to weigh on investor sentiment. BlockFi, Liquid, Genesis, and Gemini Earn news tested buyer appetite, with more likely to follow.
News of Binance, ByBit, and OKX suspending support for SOL-based stablecoins USD Coin (USDC) and USD Tether (USDT) was also market bearish.
Adding to the market angst was hawkish Fed chatter that raised questions over the market’s Fed pivot bet.
However, disappointing US economic indicators provided support later in the day, with news of Binance resuming regular services for Solana-based USDT deposits offering relief.
BTC and ETH tracked a similar path to Thursday this morning, striking early highs. However, contagion risk lingers, and there is the threat of hawkish Fed chatter to reverse the early gains.
Investors will need to monitor the crypto news wires and track the NASDAQ Composite Index later in the day for direction.
Ethereum (ETH) Price Action
At the time of writing, ETH was down 1.54% to $1,218. A bullish morning saw ETH rise from an early low of $1,198 to a high of $1,232.
ETH broke through the First Major Resistance Level (R1) at $1,224 before easing back.
Technical Indicators
ETH needs to avoid the $1,202 pivot to retarget the First Major Resistance Level (R1) at $1,224 and the morning high of $1,232. An ETH return to $1,230 would signal a bullish afternoon session. However, the crypto news wires and the NASDAQ Composite Index will need to provide support.
In the event of an extended rally, ETH would likely test the Second Major Resistance Level (R2) at $1,248 and resistance at $1,250. The Third Major Resistance Level (R3) sits at $1,294.
A fall through the pivot would bring the First Major Support Level (S1) at $1,178 into play. However, barring another extended afternoon sell-off, ETH should avoid sub-$1,150. The Second Major Support Level (S2) at $1,156 should limit the downside.
The Third Major Support Level sits at $1,110.
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 $1,264. The 50-day EMA fell back from the 200-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.
A move through R1 ($1,227) would bring R2 ($1,248) and the 50-day EMA ($1,264) into play. However, failure to move through the 50-day EMA would leave ETH under pressure.
Bitcoin (BTC) Price Action
At the time of writing, BTC was up 0.74% to $16,806. A mixed morning saw BTC fall to an early low of $16,673 before rising to a high of $16,977.
BTC broke through the First Major Resistance Level (R1) at $16,809 before easing back.
Technical Indicators
BTC needs to avoid the $16,609 pivot to break out from the First Major Resistance Level (R1) at $16,809 to retarget the Second Major Resistance Level (R2) at $16,934. A move back through R1 and a return to $16,900 would bring the Third Major Resistance Level (R3) at $17,259 into view.
We will expect FMOC member chatter and the NASDAQ Composite Index to influence alongside the crypto news wires.
A fall through the pivot would bring the First Major Support Level (S1) at $16,484 into play. Barring another extended sell-off, BTC should avoid sub-$16,000. The Second Major Support Level (S2) at $16,284 should limit the downside. However, negative FTX-related news could send BTC to sub-$16,000.
The Third Major Support Level (S3) sits at $15,959.
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 $17,143. The 50-day EMA eased back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.
A BTC move through R1 ($16,809) and R2 ($16,934) would give the bulls a run at the 50-day EMA ($17,157) and R3 ($17,259). However, failure to move through the 50-day EMA would leave BTC under pressure and S1 ($16,484) in view.
