ETH Move to $1,500 Hinged the Fed as BTC Returns to $19,000

Key Insights:

• Bitcoin (BTC) and ethereum (ETH) find modest support but remain under pressure.
• Market uncertainty towards today’s Federal Reserve monetary policy decision and FOMC economic projections continue to test buyer sentiment.
• Technical indicators are bearish, suggesting a possible look at 2022 lows.

On Tuesday, bitcoin (BTC) fell by 3.37% to end the day at $18,887. BTC closed out the day at sub-$19,000 for just the second time since June.

A mixed morning saw BTC rise to an early high of $19,635 before sliding to a late afternoon low of $18,754. Avoiding the First Major Support Level (S1) at $18,636 and the September low of $18,256, BTC ended the day at $18,887.

Ethereum (ETH) slid by 3.85% on Tuesday. Reversing a 3.07% gain from Monday, ETH ended the day at $1,323.

Tracking the broader market, ETH fell from an early high of $1,385 to a late low of $1,312. However, steering clear of the First Major Support Level (S1) at $1,306 and the September low of $1,279, ETH ended the day at $1,323.

Bearish sentiment toward the Fed monetary policy decision and economic outlook returned on Tuesday. A bearish NASDAQ 100 session added to the market woes as investors responded to Ford Motors (F) comments on inflation and supply chains.

Fears are that the global economy is at a tipping point and that the Fed could deliver the final blow to send emerging economies into deep and long-lasting recessions. However, bets of a percentage point later today and on November 2 have eased, providing modest price support.

This morning, the FedWatch Tool had the probability of a 75-basis point rate hike at 84% versus 16% for a percentage point move. It will come down to today’s decision and the projections. Any talk of a percentage point hike in November would likely weigh on riskier assets.

The probability of a percentage point hike in November was just 11.0%, down from 14.5% a week ago. However, beyond interest rates, there will also be plenty of market interest in the economic and inflation projections as recession fears resurface.

There are no US economic indicators between now and the Fed policy decision to shift sentiment, leaving BTC and ETH at the mercy of the market risk sentiment and the NASDAQ 100. This morning, the NASDAQ 100 Mini was up 12.5 points.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.48% to $18,977. A mixed morning saw BTC rise to an early high of $19,137 before falling to a low of $18,809.

Technical Indicators

BTC needs to move through the $19,092 pivot to target the First Major Resistance Level (R1) at $19,430 and the Tuesday high of $19,635. With investors looking ahead to today’s monetary policy decision, the NASDAQ 100 will continue to influence. There are no US economic indicators to consider today.

In the case of an extended rally, BTC should test the Second Major Resistance Level (R2) at $19,973 and resistance at $20,500. The Third Major Resistance Level (R3) sits at $20,854. The FOMC will need to deliver a dovish 75-basis point rate hike and project a soft economic landing to support a breakout session.

Failure to move through the pivot would leave the First Major Support Level (S1) at $18,549 in play. Barring another extended sell-off, BTC should avoid sub-$18,000. The Second Major Support Level (S2) at $18,211 should limit the damage.

The Third Major Support Level (S3) sits at $17,330.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $19,711.

The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish price signals.

A move through R1 ($19,430) and the 50-day EMA ($19,711) would give the bulls a run at R2 ($19,973) and the 100-day EMA ($20,064). The 200-day EMA sits at $20,591. However, failure to move through the 50-day EMA would leave BTC under pressure.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 1.13% to $1,338. A mixed morning saw ETH rise to an early high of $1,346 before falling to a low of $1,316.

Technical Indicators

ETH needs to move through the $1,340 pivot to target the First Major Resistance Level (R1) at $1,368 and the Tuesday high of $1,385. The Fed will have to deliver a dovish rate hike and crypto-friendly economic projections to support a bullish session.

In the event of an extended rally, ETH could target the Second Major Resistance Level (R2) at $1,413. The Third Major Resistance Level (R3) sits at $1,486.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,295 in play. Barring an extended afternoon sell-off, ETH should avoid sub-$1,200. The Second Major Support Level (S2) at $1,267 should limit the downside.

The Third Major Support Level (S3) sits at $1,194.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 50-day EMA, currently at $1,446. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

An ETH breakout from R1 ($1,368) would give the bulls a run at R2 ($1,413) and the 50-day EMA ($1,446). However, market risk sentiment will need to improve materially to support a return to $1,400. Failure to move toward the 50-day EMA would leave ETH under pressure near-term.