ETH Return To $1,700 US Data and Fed Chatter Dependent

Key Insights:

• It was a mixed Thursday session for bitcoin (BTC) and ethereum (ETH), with ETH bucking a bearish market trend.
• Regulatory risk jitters weighed on investor appetite, while progress toward the Shanghai hard fork delivered ETH price support.
• However, ETH and BTC were in positive territory this morning.

Ethereum (ETH) rose by 0.49% on Thursday. Partially reversing a 1.02% loss from Wednesday, ETH ended the day at $1,651. Despite the bullish session, ETH fell short of the $1,700 hand for the second consecutive session.

A bullish start to the day saw ETH rise to an early high of $1,679 before hitting reverse. Coming up against the First Major Resistance Level (R1) at $1,675, ETH slid to a mid-day low of $1,629. However, steering clear of the First Major Support Level (S1) at $1,603, ETH revisited the $1,670 handle before easing back.

On Thursday, bitcoin (BTC) fell by 1.00%. Following a 1.12% loss on Wednesday, BTC ended the day at $23,950. The bearish session left BTC at sub-$24,000 for the first time in seven sessions. BTC extended its losing streak to three sessions,

A bullish start to the day saw BTC rise to an early morning high of $24,600. Coming up against the First Major Resistance Level (R1) at $24,591, BTC slid to a mid-day low of $23,622. BTC briefly fell through the First Major Support Level (S1) at $23,684 before ending the day at $23,950.

Regulatory Activity and US Stats Delivered Mixed Sentiment

It was a busy Thursday session. US economic indicators delivered afternoon support. Despite lingering Fed Fear, an unexpected fall in jobless claims and Q4 GDP numbers were crypto-friendly. The latest figures continued to ease fears of a near-term US economic recession.

However, news of the SEC and the New York Department of Financial Services (NYDFS) objecting to the Binance.US acquisition of Voyager was bearish. Binance.US plans to acquire Voyager contributed to easing contagion risk at the end of 2022.

IMF and Fed released papers highlighting risks associated with crypto-related assets, adding to the bearish mood.

However, Ethereum-related news delivered ETH price support. On Thursday, Coinbase (COIN) announced the launch of Base. According to the Coinbase announcement,

“Base is an Ethereum L2 that offers a secure, low-cost, developer-friendly way for anyone, anywhere, to build decentralized apps. Our goal with Base is to make onchain the next online and onboard 1B+ users into the crypto economy.”

Coinbase added,

“Important: Base is not a token. We do not plan to issue a new network token for Base and will use ETH as the native gas token.”

Progress toward an end-of-February Shapella network upgrade was also price positive. The upgrade will allow validators to withdraw their stake from the Beacon Chain back to the execution layer as well as additional functionality.

The Day Ahead

US economic indicators and the NASDAQ Index will influence the afternoon session. Core PCE Price Index, personal income, and spending will draw interest. An unexpected rise in the Core PCE Price Index would refuel Fed Fear going into the weekend.

Investors should also track FOMC member chatter. FOMC member Loretta Mester will speak today.

However, US regulatory activity and US lawmaker chatter will need continued monitoring. Investors should also track the crypto news wires for Binance, FTX, Silvergate Bank updates, and SEC v Ripple news that could move the dial.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.16% to $1,653. A mixed start to the day saw ETH fall to an early low of $1,647 before rising to a high of $1,665.

Technical Indicators

ETH needs to avoid a fall through the $1,653 pivot to target the First Major Resistance Level (R1) at $1,677 and $1,700. A move through the Thursday high of $1,679 would signal a breakout session. However, Shanghai hard fork updates 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 $1,703. The Third Major Resistance Level (R3) sits at $1,753.

A fall through the pivot would bring the First Major Support Level (S1) at $1,627 into play. However, barring a broad-based crypto market sell-off, ETH should avoid sub-$1,600. The Second Major Support Level (S2) at $1,603 should limit the damage. The Third Major Support Level (S3) sits at $1,553.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. Ethereum sat at the 50-day EMA, currently at $1,655. The 50-day EMA moved away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A breakout from the 50-day EMA ($1,655) would support a move through R1 ($1,679) to target R2 ($1,703). However, failure to move through the 50-day EMA ($1,655) would give the bears a run at the 100-day ($1,637) and S1 ($1,629). A breakout from the 50-day EMA would send a bullish signal.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.16% to $23,989. A mixed start to the day saw BTC fall to an early low of $23,906 before rising to a high of $24,150.

Technical Indicators

BTC needs to move through the $24,057 pivot to target the First Major Resistance Level (R1) at $24,493 and the Thursday high of $24,600. A return to $24,500 would signal a breakout session. The crypto news wires and US stats 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 $25,035 and resistance at $25,500. The Third Major Resistance Level (R3) sits at $26.013.

Failure to move through the pivot would leave the First Major Support Level (S1) at $23,515 in play. However, barring another Fed-fueled crypto sell-off, BTC should avoid sub-$23,000. The Second Major Support Level (S2) at $23,079 should limit the downside.

The Third Major Support Level (S3) sits at $22,101.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a mixed signal. BTC sat below the 50-day EMA ($24,055). The 50-day EMA flattened on the 100-day EMA, while the 100-day EMA widened from the 200-day EMA, delivering mixed signals.

A move through the 50-day EMA ($24,055) would support a breakout from R1 ($24,493) to target R2 ($25,035) and $25,500. However, a fall through the 100-day EMA ($23,631) and S1 ($23,515) would give the bears a run at S2 ($23,079) and the 200-day EMA ($22,804). A move through the 50-day EMA ($24,055) would send a bullish signal.