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ETH Faces Sub-$1,300, with BTC Eying Sub-$19,500 on Hawkish Fed

By:
Bob Mason
Updated: Oct 7, 2022, 09:00 UTC

There is a sense of calm for BTC and ETH this morning. However, US nonfarm payrolls and FOMC member chatter likely to deliver market volatility later today.

ETH and BTC - technical analysis - FX Empire

Key Insights:

  • Bitcoin (BTC) and ethereum (ETH) saw red for a second consecutive day on Thursday.
  • US economic indicators took a back seat, with hawkish FOMC member chatter weighing on the NASDAQ 100, BTC, and ETH.
  • However, the technical indicators send mixed signals, with the EMAs for BTC bullish and bearish for ETH.

On Thursday, bitcoin (BTC) fell by 0.97%. Following a 0.92% loss on Wednesday, BTC ended the day at $19,960. Notably, BTC ended the day at sub-$20,000 for the first time in three sessions.

A bullish start to the day saw BTC strike an early high of $20,455. Coming up against the First Major Resistance Level (R1) at $20,429, BTC fell to a late low of $19,866. However, coming within range of the First Major Support Level (S1) at $19,816, BTC found support to wrap up the day at $19,960.

Ethereum (ETH) slipped by 0.07%. Following a modest 0.66% decline on Wednesday, ETH ended the day at $1,352.

Tracking the broader market, ETH rose to an early morning high of $1,384. ETH broke through the First Major Resistance Level (R1) at $1,373 before hitting reverse. The reversal saw ETH slide to a late low of $1,345. However, steering clear of the First Major Support Level (S1) at $1,325, ETH ended the day at $1,352.

US economic indicators had a muted price impact on BTC and ETH. Initial jobless claims increased from 190k to 219k in the final week of September. However, with today’s US nonfarm payrolls in focus, the markets brushed aside the weekly increase.

Fed chatter did draw attention on Thursday, with FMOC member Charles Evans talking big on interest rates. Late in the US session, Evans told the markets the Fed has 125 basis points left in the tank for the remainder of the year. Based on the 125-basis point projection, the Federal Funds Rate would end the year at 4.5%.

With FOMC members chanting the Fed’s mantra, today’s US labor market numbers could push projections higher. Economists forecast the unemployment rate to hold steady at 3.7% and for nonfarm payrolls to rise by 250k. Investors will also need to monitor revisions to August numbers.

A fall in the unemployment rate would likely weigh on riskier assets.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.13% to $19,986. A mixed morning saw BTC rise to an early high of $20,053 before falling to a low of $19,819.

BTC finds morning support.
BTCUSD 071022 Daily Chart

Technical Indicators

BTC needs to move through the $20,094 pivot to target the First Major Resistance Level (R1) at $20,321 and the Thursday high of $20,455. A BTC move through $20,500 would signal a bullish session. However, US nonfarm payroll numbers will need to disappoint to support a breakout session.

In the case of an extended rally, BTC should test the Second Major Resistance Level (R2) at $20,683 and resistance at $21,000. The Third Major Resistance Level (R3) sits at $21,272.

Failure to move through the pivot would leave the First Major Support Level (S1) at $19,732 in play. Barring an extended sell-off, BTC should avoid sub-$19,500. The Second Major Support Level (S2) at $19,505 should limit the downside. However, impressive NFP numbers and hawkish Fed chatter would pressure BTC later today.

The Third Major Support Level (S3) sits at $18,916.

BTC support levels in play below the pivot.
BTCUSD 071022 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bullish signal. This morning, bitcoin sat above the 200-day EMA, currently at $19,930.

After the 50-day EMA bullish cross through the 100-day EMA, the 50-day EMA pulled away from the 100-day EMA. The 100-day EMA narrowed to the 200-day EMA, delivering bullish price signals.

A BTC hold above the 200-day EMA ($19,930) would support a breakout from R1 ($20,321) to target R2 ($20,683). However, a fall through the 200-day EMA ($19,930) would give the bears a run at the 50-day EMA ($19,760) and S1 ($19,732).

EMAs bullish.
BTCUSD 071022 4 Hourly Chart

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.52% to $1,359. A mixed morning saw ETH rise to an early high of $1,362 before falling to a low of $1,346.

ETH finds early support.
ETHUSD 071022 Daily Chart

Technical Indicators

ETH needs to move through the $1,360 pivot to target the First Major Resistance Level (R1) at $1,376 and the Thursday high of $1,384. Crypto-friendly US economic indicators and FOMC member chatter would support a breakout from R1 ($1,376).

In the event of an extended rally, the Second Major Resistance Level (R2) at $1,399 and $1,400 would likely come into play. The Third Major Resistance Level (R3) sits at $1,438.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,337 in play. Barring an extended US session sell-off, ETH should avoid sub-$1,300. The Second Major Support Level (S2) at $1,321 should limit the downside.

However, impressive labor market numbers from the US could send ETH on the slide. The Third Major Support Level (S3) sits at $1,282.

ETH support levels in play below the pivot.
ETHUSD 071022 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a less bearish signal. Ethereum sat at the 100-day EMA, currently at $1,360. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

An ETH hold above the 100-day EMA ($1,360) would support a breakout from R1 ($1,376) to bring R2 ($1,399) and $1,400 into view. However, a slide through the 100-day EMA ($1,360) and the 50-day EMA ($1,342) would give the bears a run at sub-$1,300. The 200-day EMA sits at $1,420.

EMAs bearish.
ETHUSD 071022 4 Hourly Chart

About the Author

Bob Masonauthor

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.

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