ETH Target $1,350 on Sentiment Toward Fed Policy and the China Economy

Key Insights:

• It was a bullish session for bitcoin (BTC) and ethereum (ETH) on Sunday, with BTC wrapping up the day at $17,000 for the first time since mid-December.
• Sentiment toward Fed monetary policy and the US economic outlook fueled a bullish end to the week.
• BTC and ETH continued to move northwards this morning, with the appetite for riskier assets picking up through the morning session.

Ethereum (ETH) rose by 2.06% on Sunday. Reversing a 0.39% loss from Saturday, ETH ended the week up by 7.50% to $1,290.

A mixed start to the day saw ETH fall to an early low of $1,257 before making a move. ETH fell through the First Major Support Level (S1) at $1,260 before rallying to a final-hour high of $1,295. ETH broke through the Major Resistance Levels to end the day at $1,290.

On Sunday, bitcoin (BTC) rose by 1.07%. Reversing a 0.06% loss from Saturday, BTC ended the week up by 2.99% to $17,140. Notably, BTC ended the day at $17,000 for the first time since December 15.

A bearish start to the day saw BTC slip to an early low of $16,930. Steering clear of the First Major Support Level (S1) at $16,925, BTC surged to a final-hour high of $17,181. BTC broke through the Major Resistance Levels to end the day at $17,140.

Fed Policy Sentiment and the China Reopening Supported Riskier Assets

Market sentiment toward Fed monetary policy supported a bullish Tuesday afternoon session. In the final hour, the NASDAQ mini started the week in positive territory, delivering further support.

With the markets expecting the Fed to take its foot off the gas, investors are hoping for a soft landing. Today, the Chinese government removed COVID-19 restrictions, adding to the bullish mood.

Investors hope that the removal of COVID-19 restrictions will drive an economic rebound.

However, the NASDAQ Index would need to deliver support in the afternoon for BTC and ETH to avoid a reversal. Fed Chair Powell speaks tomorrow, which could test investors ahead of this week’s CPI report and the start of the earnings season.

The NASDAQ mini was up 61.75 points this morning.

Ethereum (ETH) Price Action

At the time of writing, ETH was up by 1.62% to $1,311. A bullish start to the day saw ETH rally from an early low of $1,285 to a high of $1,315.

ETH broke through the First Major Resistance Level (R1) at $1,304.

Technical Indicators

ETH needs to avoid a fall through R1 and the $1,281 pivot to retarget the Second Major Resistance Level (R2) at $1,319. A move through the morning high of $1,315 would signal a bullish session, though the crypto news wires would have to be crypto-friendly.

In the event of an extended rally, ETH would likely test the Third Major Resistance Level (R3) at $1,357.

A fall through R1 and the pivot ($1,266) would bring the First Major Support Level (S1) at $1,266 into play. However, barring an event-driven sell-off, ETH should avoid sub-$1,260 and the Second Major Support Level (S2) at $1,243. The Third Major Support Level (S3) sits at $1,205.

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 $1,250. Following Friday’s bullish cross, the 50-day EMA pulled away from the 200-day EMA, with the 100-day EMA converging on the 200-day EMA, delivering bullish signals.

A bullish cross of the 100-day EMA through the 200-day EMA would support a breakout from R2 ($1,319) to target R3 ($1,357). However, a fall through S1 ($1,266) would give the bears a run at the 50-day EMA ($1,250). A fall through the 50-day EMA would send a bearish signal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.61% to $17,245. A mixed start to the day saw BTC fall to an early low of $17,123 before rising to a high of $17,260.

BTC broke through the First Major Resistance Level (R1) at $17,237.

Technical Indicators

BTC needs to avoid a fall through R1 and the $17,084 pivot to retarget the Second Major Resistance Level (R2) at $17,335. A move through the morning high of $17,260 would signal a bullish session. However, the crypto news wires should be market-friendly to support a breakout.

In the event of an extended rally, BTC would likely test resistance at $17,500 and the Third Major Resistance Level (R3) at $17,586.

A fall through R1 and the pivot would bring the First Major Support Level (S1) at $16,986 into play. Barring a crypto risk-off-fueled sell-off, BTC should avoid sub-$16,850 and the Second Major Support Level (S2) at $16,833. The Third Major Support Level (S3) sits at $16,582.

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 200-day EMA, currently at $16,925. After the bullish cross on Saturday, the 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A hold above S1 ($16,986) and the 200-day EMA ($16,929) would support a breakout from R2 ($17,335) to target R3 ($17,586). However, a fall through S1 ($16,986) and the 200-day EMA ($16,929) would give the bears a run at the 50-day EMA ($16,884). A fall through the 50-day EMA ($16,884) would be a bearish signal.