ETH Return to $1,300 Hinged on Fed Chatter and US Labor Market Stats

Key Insights:

• On Wednesday, bitcoin (BTC) and ethereum (ETH) enjoyed breakout sessions, with BTC revisiting $17,000 for the first time since December 20.
• A fourteenth birthday, US economic indicators, and the NASDAQ Index delivered support.
• However, it was a range-bound start this morning as the market looked ahead to US labor market stats and investors responded further to the overnight FOMC meeting minutes.

Ethereum (ETH) rallied by 3.46% on Wednesday. Following a 0.04% gain on Tuesday, ETH ended the day at $1,256. ETH revisited $1,270 for the first time since December 16.

A mixed start to the day saw ETH fall to an early low of $1,212. Steering clear of the First Major Support Level (S1) at $1,205, ETH rallied to a late afternoon high of $1,272. ETH broke through the Major Resistance Levels. Despite a late pullback, ETH avoided a fall through the Third Major Resistance Level (R3) at $1,245.

On Wednesday, bitcoin (BTC) rose by 1.05%. Following a 0.01% loss on Tuesday, BTC ended the day at $16,864. Notably, BTC visited $17,000 for the first time in 21 sessions.

A bearish first hour saw BTC fall to an early morning low of $16,671. Steering clear of the First Major Support Level (S1) at $16,606, BTC rallied to a late high of $17,007. BTC broke through the First Major Resistance Level (R1) at $16,791 and the Second Major Resistance Level (R2) at $16,893 before easing back through R2 to end the day at $16,864.

Investors Turn Wary After the Hawkish FOMC Meeting Minutes

On Wednesday, the 14-year celebration of the Bitcoin genesis block drove demand for BTC, ETH, and the broader crypto market.

US economic indicators were also crypto-friendly, with the ISM Manufacturing PMI showing softening inflationary pressures and the sector falling into a deeper contraction. JOLTs job openings were also on the weaker side, albeit modestly, easing fears of a bullish US jobs report.

However, the FOMC meeting minutes revealed a Fed committed to bringing inflation to target, with the minutes dashing any hopes of a 2023 Fed pivot.

BTC and ETH movements were range-bound this morning as investors await the ADP nonfarm employment change and jobless claim numbers. While the Fed is committed to bringing inflation to target, a marked deterioration in labor market conditions could force the Fed to take its foot off the gas.

Investors will also need to consider FOMC member chatter. FOMC members Bostic and Bullard will speak today. After the hawkish minutes and the latest round of US economic indicators, less hawkish commentary would support riskier assets.

Following Wednesday’s modest gains, the NASDA mini reflected investor caution, falling by 19 points this morning.

Ethereum (ETH) Price Action

At the time of writing, ETH was down by 0.34% to $1,252. A range-bound start to the day saw ETH rise to an early high of $1,260 before falling to a low of $1,252.

Technical Indicators

ETH must avoid the $1,247 pivot to target the First Major Resistance Level (R1) at $1,281. A move through the Wednesday high of $1,272 would signal a bullish session, though US economic indicators would have to be crypto-friendly.

In the event of an extended rally, the Second Major Resistance Level (R2) at $1,307 would come into play. The Third Major Resistance Level (R3) sits at $1,367.

A fall through the pivot ($1,247) would bring the First Major Support Level (S1) at $1,221 into play. However, barring an event-driven sell-off, ETH should avoid sub-$1,200 and the Second Major Support Level (S2) at $1,187. The Third Major Support Level (S3) sits at $1,127.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. Ethereum sat above the 200-day EMA, currently at $1,230. The 50-day EMA crossed through the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

An ETH hold above the 200-day EMA ($1,230) would support a move through R1 ($1,281) to target $1,300. However, a fall through the 200-day ($1,230) could see ETH slide through the 50-day ($1,220) and the 100-day ($1,218) EMAs to bring S1 ($1,221) into view. A fall through the 50-day EMA would send a bearish signal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.07% to $16,853. A range-bound start to the day saw BTC rise to an early high of $16,888 before falling to a low of $16,823.

Technical Indicators

BTC needs to avoid a fall through the $16,847 pivot to target the First Major Resistance Level (R1) at $17,024. A return to $17,000 would signal a bullish session. However, the US stats need to be crypto-friendly to support a breakout session.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $17,183 and resistance at $17,250. The Third Major Resistance Level (R3) sits at $17,519.

A fall through the pivot would bring the First Major Support Level (S1) at $16,688 into play. Barring a crypto risk-off-fueled sell-off, BTC should avoid sub-$16,500. The Second Major Support Level (S2) at $16,511 should limit the downside. The Third Major Support Level (S3) sits at $16,175.

An adverse crypto market event would bring sub-$16,000 into play.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bullish signal. BTC sat above the 100-day EMA, currently at $16,775. 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 the 200-day EMA ($16,922) would support a breakout from R1 ($17,024) to bring R2 ($17,183) into play. However, a fall through the 100-day EMA ($17,775) would give the bears a run at the 50-day EMA ($16,736) and S1 ($16,688). A fall through the 50-day EMA would be a bearish signal.