ETH Return to $1,300 Hinged on the US PMIs and the NASDAQ Index

Key Insights:

• On Thursday, bitcoin (BTC) and ethereum (ETH) joined the broader crypto market in the red, with BTC failing to revisit $18,000.
• In the wake of the hawkish Fed rate hike, China and US economic indicators reignited recession fears, sending the NASDAQ Index, ETH, and BTC into negative territory.
• Market conditions improved this morning, with BTC and ETH seeing modest gains ahead of December private sector PMIs from Europe and the US.

Ethereum (ETH) slid by 3.13% on Thursday. Following a 0.98% decline on Wednesday, ETH ended the day at $1,267. Despite the bearish session, ETH revisited $1,300 for the third consecutive session.

A mixed start to the day saw ETH rise to an early high of $1,312. Coming up short of the First Major Resistance Level (R1) at $1,340, ETH fell to a final-hour low of $1,259. ETH fell through the First Major Support Level (S1) at $1,289 and the Second Major Support Level (S2) at $1,269 to end the day at $1,267.

On Thursday, bitcoin (BTC) slid by 2.47%. Reversing a 0.16% gain from Wednesday, BTC ended the day at $17,373. Notably, BTC fell short of $18,000 while avoiding sub-$17,000. The bearish session also ended a three-day winning streak.

Bearish throughout the Thursday session, BTC fell from an early high of $17,867 to a late low of $17,299. The extended sell-off saw BTC fall through the First Major Support Level (S1) at $17,530 to end the day at $17,373.

US Economic Indicators Reignited Recession Fears

It was a busy Thursday session for the crypto market. As the dust settled from the hawkish Fed rate hike and the arrest of former FTX CEO Sam Bankman-Fried, economic indicators from China and the US shook investor sentiment.

Early in the session, economic indicators from China sent riskier assets into negative territory. November retail sales, industrial production, and fixed asset investment figures surprised the markets.

Year-over-year, retail sales fell by 5.9% versus 0.5% in October, with industrial production up by 2.2% versus 5.0% in the previous month.

In the afternoon session, US retail sales also disappointed, raising fears of a US recession. In November, retail sales fell by 0.6% versus a 1.3% rise in October. The NASDAQ Index responded to the numbers, sliding by 3.23%, adding further pressure on BTC and ETH.

Today, the focus will shift to US private sector PMIs, which could spell more economic doom and gloom. We expect crypto sensitivity to the numbers and the NASDAQ Index response.

Away from the US economic calendar, investors will also need to monitor regulatory chatter and the crypto news wires. We expect heightened investor sensitivity to any exchange liquidity issues.

Ethereum (ETH) Price Action

At the time of writing, ETH was up by 0.86% to $1,277. A bullish start to the day saw ETH rise from an early low of $1,266 to a high of $1,280.

Technical Indicators

ETH needs to move through the $1,279 pivot to target the First Major Resistance Level (R1) at $1,300 and the Thursday high of $1,312. A move through the morning high of $1,280 would signal a bullish afternoon session. However, a breakout session will be US data and NASDAQ Index-dependent.

In the event of an extended rally, the bulls would likely take a run at the Second Major Resistance level (R2) at $1,332 and $1,350. The Third Major Resistance Level (R2) sits at $1,385.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,247 in play. However, barring an event-driven sell-off, ETH should avoid sub-$1,230 and the Second Major Support Level (S2) at $1,226. The Third Major Support Level (S3) sits at $1,173.

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 $1,275. The 50-day EMA flattened on the 200-day EMA, while the 100-day EMA narrowed to the 200-day EMA, delivering bullish signals.

A move through the 50-day ($1,279) would support a breakout from R1 ($1,300) to target R2 ($1,332). However, a fall through the 200-day ($1,275) would bring the 100-day EMA ($1,269) and S1 ($1,247) into view.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up by 0.68% to $17,491. A bullish start to the day saw BTC rise from an early low of $17,362 to a high of $17,507.

Technical Indicators

BTC needs to move through the $17,513 pivot to target the First Major Resistance Level (R1) at $17,727 and the Thursday high of $17,867. A BTC return to $17,800 would signal a bullish session.

In the event of an extended rally, BTC would likely break out from the Second Major Resistance Level (R2) at $18,081 to bring $18,500 into view. The Third Major Resistance Level (R3) sits at $18,649.

Failure to move through the pivot would leave the First Major Support Level (S1) at $17,159 in play. Barring a risk-off-fueled sell-off, BTC should avoid sub-$17,000 and the Second Major Support Level (S2) at $16,945. The Third Major Support Level (S3) sits at $16,377. An adverse crypto market event would bring sub-$17,000 into play.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. This morning, BTC sat above the 50-day EMA, currently at $17,368. The 50-day EMA moved away from the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A hold above the 50-day EMA ($17,368) would support a breakout from R1 ($17,727) to target R2 ($18,081) and $18,500. However, a fall through the 50-day ($17,368) and 200-day ($17,347) EMAs would bring the 100-day EMA ($17,213) and S1 ($17,159) into play. A fall through the 50-day EMA would signal a possible BTC return to sub-$17,000.