ETH Awaits US Retail Sales to Target $1,300 on NASDAQ Index Support

Key Insights:

• Bitcoin (BTC) and ethereum (ETH) saw green for the second consecutive session on Tuesday.
• Sentiment towards the launch of the Binance recovery fund and US economic indicators provided support, while contagion risk left the pair with modest gains.
• This morning, investor appetite was mixed. FTX remained a focal point, with new stories hitting investor confidence ahead of US economic indicators later today

Ethereum (ETH) rose by 0.81% on Tuesday. Following a 1.89% gain on Monday, ETH ended the day at $1,252. Notably, ETH fell short of $1,300 for the fourth consecutive session.

A mixed start to the day saw ETH fall to an early morning low of $1,233. Steering clear of the First Major Support Level (S1) at $1,178, ETH rose to an early afternoon high of $1,290. However, coming up short of the First Major Resistance Level (R1) at $1,298, ETH slid back to sub-$1,250 before ending the day at $1,252.

On Monday, bitcoin (BTC) rose by 1.72%. Partially reversing a 2.80% fall from Sunday, BTC ended the day at $16,626. Notably, BTC logged the second gain from nine sessions while ending the day at sub-$17,000 for the fourth time since 2020.

A bearish start to the day saw BTC slide to an early low of $15,822. BTC fell through the First Major Support Level (S1) at $16,081. However, steering clear of the Second Major Support Level (S2) at $15,818, BTC rallied to an early afternoon high of $17,200. BTC broke through the First Major Resistance Level (R1) at $16,782 before ending the day at $16,626.

Contagion risk weighed on investor sentiment going into the Tuesday session. News coverage of the FTX collapse and linked companies tested investor appetite. However, the Binance launch of the crypto recovery fund limited the downside.

Going into the afternoon session, US economic indicators and market bets of a December Fed delivered the NASDAQ and crypto market support.

Softer wholesale inflation numbers fueled the bets of a December Fed pivot, with the probability of a 75-basis point rate hike sliding to 14.6%, according to the FedWatch Tool. One week ago, the chances of a 75-basis point rate hike stood at 43.2%

However, news of FTX-linked Liquid freezing withdrawals citing the FTX collapse tested investor sentiment late Tuesday and early Wednesday. While the Binance recovery fund has provided support, the size of the fund remains unknown as more market players commit to the fund. The details could provide another market boost.

Away from the crypto market, today’s US retail sales numbers and the NASDAQ Composite Index may provide further direction. On Tuesday, BTC and ETH showed sensitivity to US stats and the NASDAQ, suggesting a normalization of market conditions.

A jump in US consumption could raise doubts over a Fed pivot, which would place greater focus on FOMC member chatter. FOMC members Barr, Williams, and Waller speak today.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 1.23% to $1,236. A mixed morning saw ETH rise to an early high of $1,267 before falling to a low of $1,226.

The First Major Support Level (S1) at $1,227 cushioned the downside.

Technical Indicators

ETH needs to move through the $1,258 pivot to target the First Major Resistance Level (R1) at $1,284 and $1,300. An ETH move through the Tuesday high of $1,290 would signal a bullish afternoon session.

In the event of an extended rally, ETH would likely test the Second Major Resistance Level (R2) at $1,315. The Third Major Resistance Level (R3) sits at $1,372.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,227 in play. However, barring another extended afternoon sell-off, ETH should avoid sub-$1,200. The Second Major Support Level (S2) at $1,201 should limit the downside.

The Third Major Support Level sits at $1,144.

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 $1,296. The 50-day EMA slid 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 ($1,284) would bring the 50-day EMA ($1,296) and R2 ($1,315) into play. However, failure to move through the 50-day EMA would leave ETH under pressure.

Bitcoin (BTC) Price Action

BTC was down 0.66% to $16,774. A mixed morning saw BTC rise to an early high of $17,002 before falling to a low of $16,704.

Technical Indicators

BTC needs to move through the $16,854 pivot to target the First Major Resistance Level (R1) at $17,164 and the Tuesday high of $17,132. A return to $17,000 would signal a bullish session. However, the direction will hinge on several factors, including FTX updates, contagion news, Binance recovery fund details, and US stats.

In the case of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $17,443 and resistance at $17,500.

The Third Major Resistance Level (R3) sits at $18,032.

Failure to move through the pivot would leave the First Major Support Level (S1) at $16,575 in play. Barring another extended sell-off, BTC should avoid sub-$16,000. The Second Major Support Level (S2) at $16,265 should limit the downside. However, negative FTX-related news could send BTC to sub-$15,000.

The Third Major Support Level (S3) sits at $15,676.

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 $17,430. The 50-day EMA fell back from the 200-day EMA, with the 100-day EMA sliding back from the 200-day EMA, delivering bearish signals.

A BTC move through R1 ($17,164) would give the bulls a run at the 50-day EMA ($17,430) and R2 ($17,443). However, failure to move through the 50-day EMA would leave BTC under pressure and S1 ($16,575) in view.