ETH to Target Sub-$1,500 on Silvergate Bank and Shanghai Upgrade

Key Insights:

• On Saturday, bitcoin (BTC) and ethereum (ETH) joined the broader market in negative territory for a third consecutive session.
• Intensifying regulator and lawmaker scrutiny of the crypto market and Silvergate Bank news weighed on investor sentiment.
• However, dip buyers returned this morning to deliver a bullish start to the Sunday session.

Ethereum (ETH) slipped by 0.19% on Saturday. Following a 4.73% slide on Friday, ETH ended the day at $1,567. ETH fell short of the $1,600 handle for the first time since February 14.

A mixed start to the day saw ETH rise to an early morning high of $1,578 before hitting reverse. Coming up short of the First Major Resistance Level (R1) at $1,630, ETH fell to a late low of $1,550. However, steering clear of the First Major Support Level (S1) at $1,529, ETH found late support to end the day at $1,567.

On Saturday, bitcoin (BTC) slipped by 0.08%. Following a 4.73% slide on Friday, BTC ended the day at $22,345. BTC avoided sub-$22,000 levels despite the bearish session.

Range-bound throughout the morning, BTC rose to a mid-morning high of $22,406 before falling into the red. Falling short of the First Major Resistance Level (R1) at $23,240, BTC slipped to a late low of $22,176. However, steering clear of the First Major Support Level (S1) at $21,726), BTC recovered to end the day at $22,345.

Silvergate Bank Updates and Crypto Scrutiny Sidelined Dip Buyers

On Saturday, investors responded further to the latest Silvergate Bank news and increasing lawmaker scrutiny of the crypto market.

News of Silvergate Capital Corp (SI) announcing the termination of its Crypto Payment Network was market negative. The crypto-friendly bank ended the service following the decision by leading crypto exchanges to sever ties.

On Wednesday, Silvergate Bank delayed filing its annual report, leading to fears of a collapse, culminating in Coinbase, Crypto.com, and others cutting ties.

Increasing lawmaker scrutiny added to the bearish mood. News of UK banks placing restrictions on crypto purchases with credit cards and the latest on Binance were market negative.

The Day Ahead

Investors should monitor the crypto news wires for Silvergate Bank, Binance, and FTX updates, with news from the ongoing SEC v Ripple case also influential.

However, regulatory activity and lawmaker chatter will likely remain the focal point, barring a ruling from the SEC v Ripple case.

For Ethereum, shanghai upgrade news will provide direction as investors consider a hearing on Capitol Hill to discuss the effects of crypto mining on the environment.

With lawmakers and regulators targeting the digital asset space with greater intensity, the talk of a ban on Bitcoin mining could see the crypto market give up its 2023 gains.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 1.13% to $1,584. A bullish start to the day saw ETH rise from an early low of $1,564 to a high of $1,588. ETH broke through the First Major Resistance Level (R1) at $1,580.

Technical Indicators

ETH needs to avoid a fall through R1 and the $1,565 pivot to target the Second Major Resistance Level (R2) at $1,593 and $1,600. A move through the morning high of $1,588 would signal a breakout 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 Third Major Resistance Level (R3) at $1,621 and resistance at $1,650.

A fall through R1 and the pivot would bring the First Major Support Level (S1) at $1,552 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,530. The Second Major Support Level (S2) at $1,537 should limit the downside. The Third Major Support Level (S3) sits at $1,509.

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 $1,602. After the Friday bearish cross, the 50-day EMA pulled back from 100-day EMA, while the 100-day EMA narrowed to the 200-day EMA, delivering bearish signals.

A move through R2 ($1,593) and the 200-day EMA ($1,602) would give the bulls a run at the 50-day ($1,610) and 100-day ($1,618) EMAs and R3 ($1,621). However, failure to move through the 200-day EMA would bring the Major Support Levels into play. An ETH move through the 50-day EMA ($1,610) would send a bullish signal.

Bitcoin (BTC) Price Action

This morning, BTC was up 1.25% to $22,624. A bullish start to the day saw BTC rise from an early low of $22,321 to a high of $23,660. BTC broke through the First Major Resistance Level (R1) at $22,442 and the Second Major Resistance Level (R2) at $22,539.

Technical Indicators

BTC needs to avoid R2, R1, and the $22,309 pivot to target the Third Major Resistance Level (R3) at $22,769 and $23,000. A BTC hold above R2 would signal a breakout session. The crypto news wires should be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test resistance at $23,000.

A fall through the Major Resistance Levels and the pivot would bring the First Major Support Level (S1) at $22,212 into play. However, barring another crypto event-fueled crypto sell-off, BTC should avoid sub-$22,000. The Second Major Support Level (S2) at $22,079 should limit the downside.

The Third Major Support Level (S3) sits at $21,849.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. BTC sat below the 200-day EMA ($22,925). After the bearish cross of the 50-day EMA through the 100-day EMA, the 50-day EMA ($23,066) slid back from the 100-day EMA ($23,353). The 100-day EMA narrowed to the 200-day EMA, delivering bearish signals.

A move through R3 ($22,769) and the 200-day EMA ($22,925) would give the bull a run at the 50-day EMA ($23,066) and 100-day ($23,243) EMAs. However, failure to move through the 200-day EMA ($22,925) would bring S1 ($22,212) into play. A move through the 50-day EMA ($23,066) would send a bullish signal.