After a mixed Friday session, BTC and ETH were in the red this morning. US economic indicators refueled Fed Fear following hotter-than-expected numbers.
Ethereum (ETH) rose by 1.28% on Friday. Following a 0.06% gain on Thursday, ETH ended the day at $1,664.
After a mixed morning session, ETH fell to an early afternoon low of $1,625 before making a move. Steering clear of the First Major Support Level (S1) at $1,608, ETH rallied to a late afternoon high of $1,677. However, coming up short of the First Major Resistance Level (R1) at $1,697, ETH eased back to end the day at $1,664.
On Friday, bitcoin (BTC) fell by 0.25%. Following a 0.98% decline on Thursday, BTC ended the day at $23,433. Despite the bearish session, BTC avoided a return to $23,000 for a second consecutive session.
After a range-bound morning, BTC rose to a late afternoon high of $23,708. Coming up short of the First Major Resistance Level (R1) at $24,026, BTC fell to a low of $23,230. However, steering clear of the First Major Support Level (S1) at $23,171, BTC found late support to end the day at $23,433.
A hotter-than-expected US Jobs Report and ISM Non-Manufacturing PMI tested investor resilience on Friday. Wage growth and a sharp increase in nonfarm payrolls raised question marks over the Fed’s willingness to take the foot off the gas.
Between now and the January CPI report, we may see Fed Fear resurface, with a pickup in inflation likely to give the Fed a greenlight to deliver a 50-basis point interest rate hike in March.
US corporate earnings added to the bearish mood, with Apple (AAPL) and Alphabet Inc. (GOOGL) delivering gloomy outlooks, weighing on riskier assets. The NASDAQ Index fell by 1.59% on Friday, leaving BTC to trail the broader crypto market.
However, ETH managed to extend its winning streak to four sessions. Investor sentiment toward the Ethereum Shanghai hard fork delivered price support. With the testing of the Zhejiang withdrawal testnet ongoing, investors are hopeful of a March hard fork. However, there were no updates from testing to influence.
For the day ahead, investors should continue monitoring the news wires for updates on Zhejiang testing. A lack of updates would leave ETH in the hands of the broader crypto market. Silvergate Bank, FTX, and Genesis updates will need tracking. However, regulatory chatter would also influence.
At the time of writing, ETH was down 0.55% to $1,655. A mixed start to the day saw ETH rise to an early high of $1,666 before falling to a low of $1,645.
ETH needs to avoid a fall through the $1,655 pivot to target the First Major Resistance Level (R1) at $1,686. A move through the Friday high of $1,677 would signal a breakout session. However, Shanghai hard fork updates 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 $1,707. The Third Major Resistance Level (R3) sits at $1,759.
A fall through the pivot would bring the First Major Support Level (S1) at $1,634 into play. However, barring a broad-based crypto market sell-off, ETH should avoid sub-$1,600. The Second Major Support Level (S2) at $1,603 should limit the downside. The Third Major Support Level (S3) sits at $1,551.
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 $1,620. The 50-day EMA moved away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.
A move hold above S1 ($1,634) and the 50-day EMA ($1,620) would support a breakout from R1 ($1,686) to target R2 ($1,707). However, a fall through S1 ($1,634) and the 50-day EMA ($1,620) would give the bears a run at S2 ($1,603). A fall through the 50-day EMA would send a bearish signal.
At the time of writing, BTC was down 0.37% to $23,347. A mixed start to the day saw BTC rise to an early high of $23,456 before falling to a low of $23,257.
BTC needs to move through the $23,457 pivot to target the First Major Resistance Level (R1) at $23,684 and the Friday high of $23,708. A return to $23,500 would signal a bullish session. However, the crypto news wires will need to 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 $23,935 and resistance at $24,000. The Third Major Resistance Level sits at $24,413.
Failure to move through the pivot would leave the First Major Support Level (S1) at $23,206 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 $22,979. The Third Major Support Level (S3) sits at $22,501.
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 $23,221. The 50-day EMA moved away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.
A hold above the 50-day EMA ($23,221) would support a breakout from R1 ($23,684) to target R2 ($23,935) and $24,000. However, a fall through the 50-day EMA ($23,221) and S1 ($23,206) would give the bears a run at S2 ($22,979). A fall through the 50-day EMA would send a bearish signal.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.