ETH Needs a Return to $1,290 or Face Sub-$1,250 on Bearish Sentiment

Key Insights:

• Bitcoin (BTC) and ethereum (ETH) joined the broader crypto market in positive territory on Friday.
• A bullish end to the day supported a reversal of early losses as investors reacted to the all-important US Jobs Report.
• However, market conditions turned bearish this morning, with investors considering the unexpected pickup in US wage growth and sizeable rise in nonfarm payrolls.

Ethereum (ETH) rose by 1.49% on Friday. Reversing a 1.39% loss from Thursday, ETH ended the day at $1,296. Despite recovering from the Thursday pullback, ETH fell short of $1,300 for the first time in three sessions.

A mixed start to the day saw ETH fall to an early low of $1,266. Steering clear of the First Major Support Level (S1) at $1,259, ETH rose to an early afternoon high of $1,298. Coming up against the First Major Resistance Level (R1) at $1,298, ETH fell back to sub-1,270 before finding late support to end the day in positive territory.

On Friday, bitcoin (BTC) rose by 0.65%. Partially reversing a 1.16% gain from Thursday, BTC ended the day at $17,090. BTC wrapped up the day at $17,000 for the second time since November 11.

After a mixed morning session, BTC rose to an early afternoon high of $17,100. Coming up short of the First Major Resistance Level (R1) at $17,253, BTC slid to an early afternoon low of $16,789. However, finding support at the First Major Support Level (S1) at $16,790, BTC bounced back to end the day at $17,090.

Early in the Friday session, investors responded further to softer US inflation and a contraction in the US manufacturing sector. Following Fed Chair Powell’s less hawkish commentary on Wednesday, Thursday’s stats supported the talk of a Fed pivot. However, the PMI also reignited recession fears.

Investor apprehension toward the all-important US Jobs Report added to the bearish mood. Recovering from early lows, the US Jobs Report sent BTC and ETH to early afternoon lows before finding support from US Treasuries and the NASDAQ Composite Index.

While wage growth and nonfarm payroll figures beat forecasts, the US unemployment rate remained at 3.7%, cushioning the impact of the NFP and wage growth numbers.

However, investor sentiment turned bearish this morning. Robust labor market conditions support a more hawkish policy move later this month. Fed Chair Powell talked of a Fed pivot but did not commit to pivoting this month.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 2.30% to $1,266. A mixed morning saw ETH rise to an early high of $1,309 before sliding to a low of $1,260.

ETH tested the First Major Resistance Level (R1) at $1,307 before falling through the First Major Support Level (S1) at $1,275.

Technical Indicators

ETH needs to move through S1 and the $1,287 pivot to retarget the First Major Resistance Level (R1) at $1,307 and the current-week high of $1,312. A return to $1,300 would signal a bullish afternoon session.

In the event of an extended rally, the Second Major Resistance Level (R2) at $1,319 would likely come into play. The Third Major Resistance Level (R2) sits at $1,351.

Failure to move through S1 and the pivot would leave the Second Major Support Level (S2) at $1,255 in play. However, barring an extended afternoon sell-off, ETH should avoid sub-$1,250 and the Third Major Support Level (S3) at $1,223.

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 $1,243. The 50-day EMA pulled away from the 100-day EMA, after Friday’s bullish cross, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A hold above S2 ($1,255) and the 50-day EMA ($1,243) would support a breakout from the 200-day EMA ($1,277) to retarget R1 ($1,307). However, a fall through S2 ($1,255) would bring the 50-day EMA ($1,243) and the 100-day EMA ($1,241) into view.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.95% to $16,927. A mixed morning saw BTC rise to an early high of $17,144 before falling to a low of $16,901.

Technical Indicators

BTC needs to move through the $16,993 pivot to target the First Major Resistance Level (R1) at $17,197. A move through the morning high of $17,144 would signal a bullish session. However, the crypto news wires should be market-friendly to support a breakout session.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $17,304 and the current-week high of $17,335. The Third Major Resistance Level (R3) sits at $17,615.

Failure to move through the pivot would leave the First Major Support Level (S1) at $16,886 into play. Barring an extended sell-off, BTC should avoid sub-$16,500. The Second Major Support Level (S2) at $16,682 should limit the downside. The Third Major Support Level (S3) sits at $16,371.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bullish signal. This morning, bitcoin sat above the 100-day EMA, currently at $16,865. 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.

A move through R1 ($17,197) would give the bulls a run at R2 ($17,304) and the 200-day EMA ($17,450). However, a fall through S1 ($16,886) and the 100-day EMA ($16,865) would bring the 50-day EMA ($16,764) into view.