ETH Eyes $1,750 on Fed Chatter and Shanghai Hard Fork News

Key Insights:

• It was a bullish Tuesday session for bitcoin (BTC) and ethereum (ETH), with BTC returning to $23,000.
• Fed Chair Powell delivered the NASDAQ Index and the crypto market with a much-needed boost.
• ETH and BTC were also on the rise this morning.

Ethereum (ETH) rallied by 3.47% on Tuesday. Reversing a 0.80% loss from Monday, ETH ended the day at $1,671.

A mixed start to the day saw ETH slip to an early low of $1,613 before making a move. Steering clear of the First Major Support Level (S1) at $1,594, ETH rallied to a late afternoon high of $1,679. ETH broke through the First Major Resistance Level (R1) at $1,647 to test the Second Major Resistance Level (R2) at $1,679 before easing back.

On Tuesday, bitcoin (BTC) rallied by 2.16%. Reversing a 0.77% loss from Monday, BTC ended the day at $23,246. BTC ended a five-day losing streak and ended the day at $23,000 for the first time in three sessions.

A mixed start to the day saw BTC slip to an early low of $22,742 before making a move. Steering clear of the First Major Support Level (S1) at $22,535, BTC rallied to a late afternoon high of $23,350. BTC broke through the First Major Resistance Level (R1) at $23,060 to come within range of the Second Major Resistance Level (R2) at $23,365 before easing back.

Fed Chair Powell Delivered a Breakout Tuesday

Fed Chair Powell delivered a breakout session on Tuesday. Last Friday, the US Jobs Report and ISM Non-Manufacturing PMI refueled fears of a more aggressive Fed interest rate trajectory to bring inflation to target. Fed Fear left BTC with a five-day losing streak going into the Tuesday session.

However, a less hawkish-than-expected Fed Chair delivered riskier assets with much-needed support. A non-committal speech was good enough for the markets, supporting a NASDAQ Index 1.90% gain and a US dollar pullback. The bullish NASDAQ Index delivered support to the crypto market.

While Powell delivered support on Tuesday, sentiment toward the Shanghai hard fork continued to provide ETH price support. Unhindered progress toward the Shanghai hard fork will remain an ETH tailwind.

For BTC and the broader crypto market, easing contagion risk and easing fears of a US economic recession are also tailwinds. However, regulatory risk remains a headwind, with investors needing to monitor the ongoing SEC v Ripple case, the outcome of which could have a material impact on the regulatory landscape.

Today, updates on the Zhejiang testnet testing and Shanghai hard fork will draw plenty of interest. However, a lack of updates would leave the pair in the hands of FOMC member chatter and the NASDAQ Index.

This afternoon, FOMC members Williams, Waller, and Barr will speak. Hawkish chatter would send the NASDAQ Index and the broader crypto market into the red.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.38% to $1,678. A bullish start to the day saw ETH rise to an early high of $1,700 before easing back. The First Major Resistance Level (R1) at $1,696 pegged ETH back from a more meaningful breakout.

Technical Indicators

ETH needs to avoid a fall through the $1,654 pivot to retarget the First Major Resistance Level (R1) at $1,696 and the morning high of $1,700. A return to $1,700 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 $1,720 and resistance at $1,750. The Third Major Resistance Level (R3) sits at $1,786.

A fall through the pivot would bring the First Major Support Level (S1) at $1,630 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,600 and the Second Major Support Level (S2) at $1,588. The Third Major Support Level (S3) sits at $1,522.

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 $1,639. 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 ($1,639) would support a breakout from R1 ($1,696) to target R2 ($1,720) and $1,750. However, a fall through the 50-day EMA ($1,639) would give the bears a run at S1 ($1,630) and the 100-day EMA ($1,610). A fall through the 50-day EMA would send a bearish signal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was flat at $23,246. A mixed start to the day saw BTC rise to an early high of $23,430 before easing back.

Technical Indicators

BTC needs to avoid a fall through the $23,113 pivot to target the First Major Resistance Level (R1) at $23,483 and test resistance at $23,500. A move through the morning high of $23,430 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 $23,721 and resistance at $24,000. The Third Major Resistance Level sits at $24,329.

A fall through the pivot would bring the First Major Support Level (S1) at $22,875 into play. However, barring a risk-off-fueled crypto sell-off, BTC should avoid sub-$22,500. The Second Major Support Level (S2) at $22,505 should limit the downside. The Third Major Support Level (S3) sits at $21,897.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA ($23,136). 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 the 50-day EMA ($23,136) would support a breakout from R1 ($23,483) to target R2 ($23,721) and $24,000. However, a fall through the 50-day EMA ($23,136) would bring S1 ($22,875) and the 100-day EMA ($22,756) into view. A fall through the 50-day EMA would send a bearish signal.