ETH Bulls Need a Dovish Fed Chair Powell to Retarget $1,700

Key Insights:

• It was a bearish start to the week for bitcoin (BTC) and ethereum (ETH), with BTC falling for a fifth consecutive session.
• Fed Fear and Binance news weighed on investor sentiment.
• However, ETH and BTC were on the rise this morning.

Ethereum (ETH) fell by 0.80% on Monday. Following a 2.34% loss on Sunday, ETH ended the day at $1,615.

After a mixed morning, ETH rose to a late afternoon high of $1,658. Coming up short of the First Major Resistance Level (R1) at $1,665, ETH slid to a final-hour low of $1,605. However, steering clear of the First Major Support Level (S1) at $1,600, ETH wrapped up the day at $1,615.

On Monday, bitcoin (BTC) fell by 0.77%. Following a 1.64% loss on Sunday, BTC ended the day at $22,755. BTC extended its losing streak to five sessions and ended the day at sub-$23,000 for the second time in six sessions.

After a choppy morning, BTC rose to a late afternoon high of $23,145. Coming up short of the First Major Resistance Level (R1) at $23,308, BTC fell to a final-hour low of $22,620. However, finding support at the First Major Support Level (S1) at $22,666, BTC ended the day at $22,755.

Binance News and Fed Fear Weighed on Investor Sentiment

Following Sunday’s pullback, Fed Fear tested investor appetite at the start of the week. Uncertainty toward Fed monetary policy following Friday’s US Jobs Report raised expectations of interest rates peaking above 5%.

News of Binance suspending US dollar withdrawals for non-Binance US users was also bearish. The shift in sentiment toward Fed monetary policy left BTC at sub-$23,000. However, ETH continued to avoid sub-$1,600. Market sentiment toward the Shanghai hard fork and Visa (V) news provided support.

Today, updates on the Zhejiang testnet testing and Shanghai hard fork will draw plenty of interest. However, market risk appetite will need to remain bullish throughout the session for BTC to end a five-day losing streak.

This afternoon, Fed Chair Powell will be in focus. Hawkish chatter would send the NASDAQ Index and the broader crypto market into the red. Investors want to assess the impact of the Jobs Report on the Fed’s policy goals.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 1.28% to $1,635. A bullish start to the day saw ETH rise from an early low of $1,613 to a high of $1,638.

Technical Indicators

ETH needs to avoid a fall through the $1,626 pivot to target the First Major Resistance Level (R1) at $1,647 and the Monday high of $1,658. A return to $1,650 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 $1,679 and resistance at $1,700. The Third Major Resistance Level (R3) sits at $1,732.

A fall through the pivot would bring the First Major Support Level (S1) at $1,594 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,580 and the Second Major Support Level (S2) at $1,573. The Third Major Support Level (S3) sits at $1,520.

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 $1,633. 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 ($1,633) would support a breakout from R1 ($1,647) to target R2 ($1,679) and $1,700. However, a fall through the 50-day EMA ($1,633) would give the bears a run at the 100-day EMA ($1,604) and S1 ($1,594). A fall through the 50-day EMA would send a bearish signal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.76% to $22,927. A mixed start to the day saw BTC fall to an early low of $22,742 before rising to a high of $22,939.

Technical Indicators

BTC needs to avoid a fall through the $22,840 pivot to target the First Major Resistance Level (R1) at $23,060 and the Monday high of $23,145. A return to $23,000 would signal a breakout 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 $23,365 and resistance at $23,500. The Third Major Resistance Level sits at $23,890.

A fall through the pivot would bring the First Major Support Level (S1) at $22,535 into play. However, barring a risk-off-fueled crypto sell-off, BTC should avoid sub-$22,000. The Second Major Support Level (S2) at $22,315 should limit the downside. The Third Major Support Level (S3) sits at $21,790.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a mixed signal. BTC sat above the 100-day EMA ($22,709). The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA widened from the 200-day EMA, delivering mixed signals.

A move through R1 ($23,060) and the 50-day EMA ($23,138) would support a run at R2 ($23,365) and $23,500. However, a fall through the 100-day EMA ($22,709) would bring S1 ($22,535) into view. A move through the 50-day EMA would send a bullish signal.