ETH Bulls Eye $1,700 to Target $1,750 on Zhejiang Testing

Key Insights:

• It was a bullish Wednesday for bitcoin (BTC) and ethereum (ETH), with ETH testing resistance at $1,650.
• Fed Chair Powell and the NASDAQ Index delivered support, with Shanghai hard fork news also bullish.
• ETH and BTC continued to make gains this morning as investors responded further to the Fed Chair Powell press conference.

Ethereum (ETH) rallied by 3.60% on Wednesday. Following a 1.21% gain on Tuesday, ETH ended the day at $1,642.

After a mixed morning session, ETH fell to an early evening low of $1,557. ETH briefly fell through First Major Support Level (S1) at $1,562 before rallying to a late high of $1,648. ETH broke through the First Major Resistance Level (R1) at $1,606 and the Second Major Resistance Level (R2) at $1628 to end the day at $1,642.

On Wednesday, bitcoin (BTC) rose by 2.54%. Following a 1.34% gain on Tuesday, BTC ended the day at $23,723. Despite the bullish session, BTC failed to strike a new 2023 high.

After a range-bound morning, BTC slid to a pre-Fed Chair Powell press conference low of $22,757. BTC fell through the First Major Support Level (S1) at $22,811 before surging to a late high of $23,814. BTC broke through the First Major Resistance Level (R1) at $23,378 and the Second Major Resistance Level (R2) at $23,621 to end the day at $23,723.

Fed Chair Powell and the NASDAQ Delivered A Bullish Mid-Week Session

On Wednesday, weaker-than-expected private sector PMI numbers and ADP nonfarm employment change figures weighed on investor sentiment. Investor angst ahead of the heavily anticipated Fed Chair Powell press conference added to the bearish mood.

However, Fed Chair Powell delivered a market-friendly press conference, supporting a late broad-based crypto market rally. The NASDAQ Index rose by 2.00% in response.

Ethereum network news contributed to the ETH gain on Wednesday. The release of the first public withdrawal testnet, Zhejiang, drew interest. Ethereum users can simulate staked ETH withdrawals, a feature of the Shanghai hard fork.

For the day ahead, updates on Zhejiang testing will provide direction. However, US economic indicators will also draw interest, with US jobless claims and factory and core durable goods orders in focus.

Following the Fed Chair Powell press conference, investor sensitivity to US economic indicators will linger. A deterioration in labor market conditions and hints of a US recession would test investor appetite.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 1.69% to $1,670. A bullish start to the day saw ETH rise from an early low of $1,640 to $1,698. ETH broke through the First Major Resistance Level (R1) at $1,674 before easing back

Technical Indicators

ETH needs to avoid a fall through the $1,616 pivot to retarget the First Major Resistance Level (R1) at $1,674 and the morning high of $1,698. Avoiding sub-$1,650 would signal a breakout session. However, economic indicators and Shanghai hard fork updates will have to 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 $1,707 and resistance at $1,750. The Third Major Resistance Level (R3) sits at $1,798.

A fall through the pivot would bring the First Major Support Level (S1) at $1,583 into play. However, barring a broad-based crypto market sell-off, ETH should avoid sub-$1,550 and the Second Major Support Level (S2) at $1,525. The Third Major Support Level (S3) sits at $1,434.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. Ethereum sat above the 50-day EMA, currently at $1,598. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A move hold above the 50-day EMA ($1,598) would support a breakout from R1 ($1,674) to retarget R2 ($1,707) and $1,750. However, a fall through the 50-day EMA ($1,598) would give the bears a run at S1 ($1,583) and the 100-day EMA ($1,567). A fall through the 50-day EMA would send a bearish signal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.37% to $23,811. A mixed start to the day saw BTC rise to an early high of $24,240 before falling to a low of $23,657. BTC tested the First Major Resistance Level (R1) at $24,106 before visiting the red.

Technical Indicators

BTC needs to avoid a fall through the $23,431 pivot to break out from the First Major Resistance Level (R1) at $24,106 and target the Second Major Resistance Level (R2) at $24,488. A move through the morning high of $24,240 would signal another bullish session. However, US economic indicators and the NASDAQ Index need to provide support.

In the event of another bullish session, the bulls would likely test resistance at $25,000. The Third Major Resistance Level sits at $25,545.

A fall through the pivot would bring the First Major Support Level (S1) at $23,049 into play. However, barring a risk-off-fueled crypto sell-off, BTC should avoid sub-$23,000 and the Second Major Support Level (S2) at $22,374. The Third Major Support Level (S3) sits at $21,317.

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 $23,039. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above S1 ($23,049) and the 50-day EMA ($23,039) would support a breakout from R1 ($24,106) to target R2 ($24,488) and $25,000. However, a fall through S1 ($23,049) and the 50-day EMA ($23,039) would give the bears a run at S2 ($22,374) and the 100-day EMA ($22,284). A fall through the 50-day EMA would send a bearish signal.