ETH Bears to Target Sub-$1,500 on Increasing Crypto Scrutiny

Key Insights:

• On Friday, bitcoin (BTC) and ethereum (ETH) joined the broader market in negative territory, with BTC sliding to sub-$22,000.
• A bullish NASDAQ Composite Index failed to deliver support as investors responded to the latest on Silvergate Bank.
• The pair remained under pressure this morning, with the Silvergate Bank saga likely to dominate the crypto news wires.

Ethereum (ETH) slid by 4.73% on Friday. Following a 1.02% loss on Thursday, ETH ended the day at $1,570.

A mixed start to the day saw ETH rise to an early morning high of $1,649 before hitting reverse. Coming up short of the First Major Resistance Level (R1) at $1,678, ETH slid to a late low of $1,548. ETH fell through the First Major Support Level (S1) at $1,619 and the Second Major Support Level (S2) at $1,589 to end the day at $1,570.

On Friday, bitcoin (BTC) also slid by 4.73%. Following a 0.99% decline on Thursday, BTC ended the day at $22,362. The bearish session saw BTC revisit sub-$22,000 before finding support.

A mixed start to the day saw BTC rise to a first hour high of $23,482. However, falling short of the First Major Resistance Level (R1) at $23,780, BTC slid to an early morning low of $21,968. BTC fell through the Major Support Levels before a move through the Third Major Support Level (S3) at $22,302 to end the day at $22,362.

Silvergate Bank News and SEC and US Lawmaker Chatter Sink the Market

Amidst the increasing SEC and US lawmaker scrutiny, fears of a Silvergate Bank collapse sent BTC and ETH into the deep red. News of the major crypto exchanges, including Coinbase, Crypto.com, Paxos, and Bitstamp, severing ties with the crypto-friendly bank drove selling pressure.

The decision to cut ties came in response to Silvergate Bank delaying filing its annual reports on Wednesday. One statement resonated,

“The Company is evaluating the impact that these subsequent events have on its ability to continue as a going concern for the twelve months following the issuance of its financial statements.”

Increased US lawmaker scrutiny of Binance and news of US lawmakers targeting Bitcoin mining also weighed on investor sentiment.

The Day Ahead

Investors should continue to monitor the crypto news wires for regulatory activity and US lawmaker chatter. Silvergate Bank, Binance, and FTX updates need consideration, with news from the ongoing SEC v Ripple case also influential.

For Ethereum, shanghai upgrade news will provide direction while Proof-of-Work protocols prepare for a hearing on Capitol Hill on the effects of crypto mining on the environment.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.11% to $1,571. A range-bound start to the day saw ETH rise to an early high of $1,578 before easing back.

Technical Indicators

ETH needs to move through the $1,589 pivot to target the First Major Resistance Level (R1) at $1,630 and $1,650. A return to $1,600 would signal a breakout session. However, Shanghai upgrade news 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 $1,690 and resistance at $1,700. The Third Major Resistance Level (R3) sits at $1,791.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,529 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,500 and the Second Major Support Level (S2) at $1,488. The Third Major Support Level (S3) sits at $1,387.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 200-day EMA, currently at $1,604. After the Friday bearish cross, the 50-day EMA pulled back from 100-day EMA, while the 100-day EMA narrowed to the 200-day EMA, delivering bearish signals.

A move through the 200-day EMA ($1,604) would give the bulls a run at the 50-day ($1,621) and 100-day ($1,625) EMAs and R1 ($1,630). However, failure to move through the 200-day EMA would leave the Major Support Levels in play. An ETH move through the 50-day EMA ($1,621) would send a bullish signal.

Bitcoin (BTC) Price Action

This morning, BTC was down 0.08% to $22,343. A range-bound start to the day saw BTC rise to an early high of $23,397 before easing back.

Technical Indicators

BTC needs to move through the $22,604 pivot to target the First Major Resistance Level (R1) at $23,240. A return to $23,000 would signal a breakout session. The crypto news wires should 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 $24,118 and resistance at $25,000. The Third Major Resistance Level (R3) sits at $25,632.

Failure to move through the pivot would leave the First Major Support Level (S1) at $21,726 in play. However, barring another crypto event-fueled crypto sell-off, BTC should avoid sub-$21,000. The Second Major Support Level (S2) at $21,090 should limit the downside.

The Third Major Support Level (S3) sits at $19,576.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. BTC sat below the 200-day EMA ($22,959). After the bearish cross of the 50-day EMA through the 100-day EMA, the 50-day EMA ($23,252) pulled back from the 100-day EMA ($23,353). The 100-day EMA narrowed to the 200-day EMA, delivering bearish signals.

A move through the 200-day EMA ($22,959) would give the bulls a run at R1 ($23,240) and the 50-day EMA ($23,252) and 100-day ($23,353) EMAs. However, failure to move through the 200-day EMA ($22,959) would leave S1 ($21,726) in play. A move through the 50-day EMA ($23,252) would send a bullish signal.