ETH to Face Increasing Resistance at $1,600 on Shanghai Upgrade Delay

Key Insights:

• On Monday, ethereum (ETH) ended a four-day losing streak, rising by 0.06% to end the day at $1,566.
• Fed Fear and regulatory scrutiny resurfaced, with a delay to the Shanghai upgrade leaving ETH flat on the day.
• Technical indicators remain bearish, with sub-$1,500 in view.

Ethereum (ETH) rose by 0.06% on Monday. Partially reversing a 0.13% gain from Sunday, ETH ended the day at $1,566. ETH fell short of the $1,600 handle for the third consecutive session while ending a four-day losing streak.

A mixed start to the day saw ETH fall to a mid-morning low of $1,555. Finding support at the First Major Resistance Level (R1) at $1,550, ETH rose to a high of $1,583 before easing back. The First Major Resistance Level (R1) at $1,584 capped the upside on Monday.

Fed Angst and Crypto Regulatory Leave ETH on the Defensive

It was another quiet session on Monday. There were no updates on the delayed Shanghai upgrade to provide direction.

The lack of upgrade news left ETH in the hands of the broader crypto market. Increasing regulatory activity and lawmaker scrutiny continued to weigh on investor sentiment. Fed Fear also resurfaced as investors looked ahead to Fed Chair Powell’s testimony later today.

On Monday, the US banking watchdog the Comptroller of the Currency delivered anti-crypto commentary. The Chief of Office reportedly compared the collapse of FTX with the collapse of Bank of Credit and Commerce International (BCCI).

Michael Hsu reportedly said,

“We won’t be able to know which players are trustworthy and which aren’t until a credible third party, like a consolidated home country supervisor, can meaningfully oversee them.”

Hsu added,

“Currently, no crypto platforms are subject to consolidated supervision. Not one.”

The comments come at a difficult time for the crypto market, with the collapse of FTX eroding trust.

Investor apprehension ahead of Fed Chair Powell’s testimony also tested buyer appetite. A shift to a more hawkish posture would weigh on riskier assets.

The Day Ahead

It is a quiet day on the US economic calendar. There are no US economic indicators for investors to consider, leaving Fed Chair Powell to influence the NASDAQ Composite Index and broader crypto market.

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.

For Ethereum, shanghai upgrade news will need consideration along with chatter from US lawmakers and regulators.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.55% to $1,575. A mixed start to the day saw ETH fall to an early low of $1,561 before rising to a high of $1,576.

Technical Indicators

ETH needs to avoid the $1,568 pivot to target the First Major Resistance Level (R1) at $1,581 and the Monday high of $1,583. 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 $1,596 and resistance at $1,600. The Third Major Resistance Level sits at $1,624.

A fall through the pivot would bring the First Major Support Level (S1) at $1,553 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,530. The Second Major Support Level (S2) at $1,540 should limit the downside. The Third Major Support Level (S3) sits at $1,512.

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 $1,693. The 50-day EMA pulled back from the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A move through R1 ($1,581) would give the bulls a run at the 50-day EMA ($1,593) and R2 ($1,596). A move through the 50-day EMA would send a bullish signal. However, failure to move through the 50-day EMA ($1,593) would leave the Major Support Levels in play.