ETH Bulls Target $1,700 on USD Coin Re-Peg and Silicon Valley Bank News

Key Insights:

• On Sunday, ethereum (ETH) surged by 7.28% to end the day at $1,592.
• US regulatory intervention delivered a breakout afternoon session as investors responded to the latest Silicon Valley Bank news.
• The technical indicators turned bullish, with $1,650 in view.

Ethereum (ETH) surged by 7.28% on Sunday. Following a 3.63% rally on Saturday, ETH ended the day at $1,592. While revisiting sub-$1,500, ETH revisited the $1,600 handle for the first time since March 3.

After a range-bound morning, ETH fell to a mid-day low of $1,460 before making a move. Steering clear of the First Major Support Level (S1) at $1,434, ETH surged to a final-hour high of $1,612. ETH broke through the First Major Resistance Level (R1) at $1,516 and the Second Major Resistance Level (R2) at $1,549 to end the day at $1,592.

US Regulators Delivered ETH Support on an SVB Intervention

It was another quiet day on the crypto news wires, with no updates on the delayed Shanghai upgrade to influence investor sentiment.

The lack of updates left the news from the US and USD Coin (USDC) to provide ETH and the broader crypto market with direction.

On Sunday afternoon, Silicon Valley Bank (SIVB) and Signature Bank (SBNY) news drove demand for riskier assets.

US regulators announced that all customers would have access to their deposits from Monday. Additionally, the Federal Reserve created a new Bank Term Funding Program to offer loans with a maturity of one year to depository institutions. Institutions would pledge Treasuries and other held assets as security.

For the crypto market, the protection of depositors’ assets was material. USD Coin returned to $0.99 in response to the announcement. On Saturday, Circle announced it would plug a $3.3 billion hole stemming from the collapse of SVB with corporate funds. The news from Sunday removes the need for any immediate action.

On Saturday, USDC fell to a low of $0.8553 before returning to the $0.99 handle.

As investors consider the implications of the collapse of Silvergate Bank, Silicon Valley Bank, and Signature Bank, the Goerli testnet release on Tuesday will draw interest. Smooth testing would support an April Shanghai upgrade and the withdrawal of staked ETH from the Beacon Chain.

According to CryptoQuant, ETH net staking inflows stood at 16,384 ETH on Sunday. While up from 10,560 ETH on Friday, inflows are well below the 2023 high of 198,560. While the sharp decline in staking inflows was ETH price negative, the delay to the Shanghai upgrade likely contributed to the slide to sub-20,000 levels.

The fall to sub-20,000 levels has been ETH bearish.

The Day Ahead

Updates from US regulators on measures to support the banking sector will continue to draw interest. Eliminating contagion from the Silvergate Bank, Silicon Valley Bank, and Signature Bank closures would continue to drive demand for riskier assets.

The impact of the collapse of Silicon Valley Bank on the NASDAQ Composite Index and the broader crypto market will give the NASDAQ more influence this afternoon.

Investors should also track the crypto news wires, with regulatory activity and US lawmaker chatter focal points. However, a quiet session would leave Binance, FTX, and updates from the ongoing SEC v Ripple case to move the dial.

For the Ethereum network, there is also the question of security or not security. We can expect more from the CFTC and the SEC as they battle to take control of the digital asset space.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.65% to $1,603. A mixed start to the day saw ETH fall to an early low of $1,587 before rallying to a high of $1,637.

Technical Indicators

ETH needs to avoid the $1,555 pivot to retarget the First Major Resistance Level (R1) at $1,649. A move through the morning high of $1,637 would signal a bullish 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 $1,707. The Third Major Resistance Level (R3) sits at $1,859.

A fall through the pivot would bring the First Major Support Level (S1) at $1,497 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,450 and the Second Major Support Level (S2) at $1,403. The Third Major Support Level (S3) sits at $1,251.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. Ethereum sat above the 200-day EMA, currently at $1,568. The 50-day EMA narrowed to the 100-day EMA, with the 100-day EMA closing in on the 200-day EMA, delivering bullish signals.

A hold above the 200-day EMA ($1,568) would support a breakout from R1 ($1,649) to target R2 ($1,707). However, a fall through the 100-day ($1,552) and 50-day ($1,521) EMAs would bring S1 ($1,497) into view. A fall through the 50-day EMA would send a bearish signal.