ETH to Retarget $2,000 on Fed Rate Hike and Interest Rate Outlook

Key Insights:

• On Monday, ethereum (ETH) joined the broader market in positive territory, rising by 3.91% to end the day at $1,807.
• Filings from the SEC v Ripple case and easing bank contagion risk delivered a return to $1,800.
• The technical indicators remained bullish, leaving $2,000 in view.

Ethereum (ETH) rallied by 3.91% on Tuesday. Reversing a 2.63% loss from Monday, ETH ended the day at $1,807. ETH held onto the $1,800 handle for the first time since August.

A bearish start to the day saw ETH fall to a mid-morning low of $1,724. Steering clear of the First Major Support Level (S1) at $1,709, ETH rallied to an early afternoon high of $1,840. ETH broke through the First Major Resistance Level (R1) at $1,789. However, coming up against the Second Major Resistance Level (R2) at $1,839, ETH eased back to end the day at $1,807.

SEC v Ripple Case News and Easing Bank Contagion Risk Delivered Support

The fear of another bank collapse eased on Tuesday, supporting riskier assets ahead of the Fed policy decision. Bank stocks rallied as governments and regulators contained the banking crisis.

The NASDAQ Composite Index rose by 1.58% on Tuesday, with the Dow and S&P 500 seeing gains of 0.98% and 1.30%, respectively. This morning, the NASDAQ mini was up 15 points.

However, updates from the ongoing SEC v Ripple news added to the bullish sentiment. On Tuesday, the market reaction to the latest filing in the ongoing SEC v Ripple case delivered ETH and broader crypto market support. XRP rallied by 25.25% as investors digested the Ripple filing to support the fair notice defense.

The defendants referenced the Voyager Digital bankruptcy case, citing bankruptcy Judge Michael Wiles’s rulings that favored Voyager Digital.

Despite the bullish session, ETH staking inflows returned to sub-10,000 on Tuesday. According to CryptoQuant, staking inflows fell from 28,768 ETH on Monday to 9,248 ETH on Wednesday, the lowest ETH staking inflows since March 5 (3,552 ETH).

While the pullback signals uncertainty over the market reaction to the Shapella upgrade, the current trend is upward, suggesting a bullish response.

The Day Ahead

This afternoon, there are no US economic indicators to test buyer appetite. The lack of stats will leave the Fed policy decision, FOMC projections, and Fed Chair Powell in the spotlight.

While the Fed will influence investor appetite, updates from the ongoing SEC v Ripple case and Binance-related news will also provide direction.

With the crypto market continuing to face regulation by enforcement, a Ripple victory could see the SEC lose the right to regulate the digital asset space. Crypto market participants favor the CFTC over the SEC.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 0.63% to $1,796. A bearish start to the day saw ETH fall from an early high of $1,808 to a low of $1,784.

Technical Indicators

ETH needs to avoid the $1,790 pivot to target the First Major Resistance Level (R1) at $1,856. A move through the Tuesday high of $1,840 would signal a breakout session. However, the Fed 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 $1,906 and resistance at $1,950. The Third Major Resistance Level (R3) sits at $2,022.

A fall through the pivot would bring the First Major Support Level (S1) at $1,741 into play. However, barring an event-fueled broad-based crypto market sell-off, ETH should avoid sub-$1,700 and the Second Major Support Level (S2) at $1,674. The Third Major Support Level (S3) sits at $1,558.

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 $1,732. The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above S1 ($1,741) and the 50-day EMA ($1,732) would support a breakout from R1 ($1,857) to target R2 ($1,906) and $1,950. However, a fall through S1 ($1,741) and the 50-day EMA ($1,732) would give the bears a run at the 100-day EMA ($1,681) and S2 ($1,674). A fall through the 50-day EMA would send a bearish signal.