ETH Remains at Risk of Sub-$1,500 on Shanghai Upgrade Delay

Key Insights:

• On Sunday, bitcoin (BTC) and ethereum (ETH) had a mixed session, with ETH bucking a bullish market trend.
• A quiet Sunday session left dip buyers to deliver support, though the broader market was range-bound, weighed by increased lawmaker scrutiny.
• It was also a slow start to the week, with BTC and ETH seeing modest gains.

Ethereum (ETH) slipped by 0.13% on Sunday. Following a 0.19% loss on Saturday, ETH ended the week down by 4.67% to $1,565. ETH fell short of the $1,600 handle for the second time since February 14.

A choppy start to the day saw ETH rise to an early morning high of $1,588 before hitting reverse. Coming up against the First Major Resistance Level (R1) at $1,580, ETH fell to a low of $1,554. Finding support at the First Major Support Level (S1) at $1,552, ETH ended the day at $1,565.

On Saturday, bitcoin (BTC) rose by 0.38%. Reversing a 0.08% loss from Saturday, BTC ended the week down 4.80% to $22,431. While BTC avoided sub-$22,000 levels, BTC also fell short of the $23,000 handle despite the bullish session.

A choppy start to the day saw BTC rise to an early high of $22,600 before hitting reverse. BTC broke through the First Major Resistance Level (R1) at $22,442 and the Second Major Resistance Level (R2) at $22,539. However, the reversal saw BTC slide to a low of $22,200. Finding support at the First Major Support Level (S1) at $22,212, BTC ended the day at $22,431.

Dip Buyers Return Amidst Record FUD Levels and Weakening Sentiment

It was a quiet Sunday session, with no crypto events to draw investor interest. However, investors were cautious following the latest updates on Silvergate Bank and the US lawmaker focus on Binance.

While the quiet session allowed dip buyers to return, gains were modest, with prevailing crypto market headwinds capping the upside. FUD news continued to impact investor sentiment.

On Sunday, market intelligence firm Santiment said,

“Some bizarrely high levels of negative crypto sentiment have appeared this weekend, particularly here on Twitter. It’s hard to gauge what may be contributing to one of the highest levels of FUD Santimentfeed has ever recorded.”

Santiment elaborated on its findings, noting that cryptocrash has been a trending hashtag on Twitter even though the BTC pullback occurred on Friday.

For Ethereum, the Shanghai upgrade delay to April left ETH in a more bearish pattern. Following Gary Gensler’s classification of all cryptos except BTC as unregistered securities, heat from US lawmakers could overshadow progress toward the April upgrade.

The Day Ahead

It is a relatively quiet day on the US economic calendar. US factory order numbers will draw interest, though the numbers would need to be dire to spook investors. However, FOMC member commentary will influence as investors respond to mixed messaging from the Fed.

While the US economic calendar and the NASDAQ Composite Index will provide direction, the crypto news wires will likely have more influence. The NASDAQ mini was down 12 points this morning.

Investors should continue monitoring the crypto news wires for Silvergate Bank, Binance, and FTX updates. News from the ongoing SEC v Ripple case will also be influential.

However, regulatory activity and lawmaker chatter will likely remain the focal point, barring a ruling from the SEC v Ripple case.

For Ethereum, shanghai upgrade news will provide direction, while BTC investors consider a hearing on Capitol Hill to discuss the effects of crypto mining on the environment. As lawmaker scrutiny intensifies, talks of banning BTC would jolt investor sentiment.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.18% to $1,568. A mixed start to the day saw ETH rise to an early high of $1,570 before falling to a low of $1,559.

Technical Indicators

ETH needs to avoid a fall through the $1,568 pivot to target the First Major Resistance Level (R1) at $1,584 and the Sunday high of $1,588. A return to $1,580 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 $1,603. The Third Major Resistance Level sits at $1,637.

A fall through the pivot would bring the First Major Support Level (S1) at $1,550 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,530. The Second Major Support Level (S2) at $1,535 should limit the downside. The Third Major Support Level (S3) sits at $1,501.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 200-day EMA, currently at $1,600. The 50-day EMA converged on the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A bearish cross of the 50-day EMA through the 200-day EMA would support a fall through S1 ($1,550) to bring S2 ($1,535) into play. However, a move through R1 ($1,584) would give the bulls a run at the 200-day ($1,600) and 50-day ($1,600) EMAs to target the 100-day EMA ($1,612) and R2 ($1,635). A move through the 50-day EMA would send a bullish signal.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.08% to $22,450. A mixed start to the day saw BTC rise to an early high of $22,469 before falling to a low of $22,376.

Technical Indicators

BTC needs to avoid the $22,430 pivot to target the First Major Resistance Level (R1) at $22,661. A return to $22,500 would signal a bullish session. The crypto news wires and Fed chatter should 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 $22,890 and resistance at $23,000. The Third Major Resistance Level (R3) sits at $23,350.

A fall through the pivot would bring the First Major Support Level (S1) at $22,201 into play. However, barring another crypto event-fueled crypto sell-off, BTC should avoid sub-$22,000 and the Second Major Support Level (S2) at $21,970.

The Third Major Support Level (S3) sits at $21,510.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. BTC sat below the 200-day EMA ($22,893). The 50-day EMA converged on the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A bearish cross of the 50-day EMA through the 200-day EMA would support a fall through S1 ($22,201) to target sub-$22,000 Support Levels. However, a move through R1 ($22,661) would give the bull a run at R2 ($22,890) and the 200-day ($22,893) and 50-day ($22,920) EMAs. A move through the 50-day EMA would send a bullish signal.