A BTC Return to $21,000 and an ETH Move to $1,400 Hinged on US Stats

Key Insights:

• Bitcoin (BTC) and ethereum (ETH) shared a second consecutive bullish session on Tuesday, with BTC wrapping up the day at $20,000 for the first time since September 17.
• US economic indicators and news of Elon Musk going ahead with the purchase of Twitter (TWTR) delivered support.
• However, the technical indicators were mixed, with ETH sitting below the 100-day EMA, signaling a leg down.

On Tuesday, bitcoin (BTC) rallied by 3.63%. Following a 2.96% gain on Monday, BTC ended the day at $20,344. Notably, BTC held onto the $20,000 handle for the first time since September 17.

A bearish start to the day saw BTC fall to an early low of $19,502. However, steering clear of the First Major Support Level (S1) at $19,172, BTC rallied to a late high of $20,543. BTC broke through the First Major Resistance Level (R1) at $19,900 and the Second Major Resistance Level (R2) at $20,168 to wrap up the day at $20,344.

Ethereum (ETH) rose by 2.95%. Following a 3.60% rally on Monday, ETH ended the day at $1,362.

Tracking the broader market, ETH slipped to an early low of $1,319. Steering clear of the First Major Support Level (S1) at $1,281, ETH rallied to a late high of $1,370. ETH broke through the First Major Resistance Level (R1) at $1,348 to test the Second Major Resistance Level (R2) at $1,372 before easing back.

Fed fear continued to subside on Tuesday, with US economic indicators driving demand for riskier assets. JOLTs job openings slid from 11.170 million to 10.053 million in August. Economists forecast a fall to 10.775 million.

FOMC member Mary Daly also delivered some comfort, saying that the Fed has the ways and the means to bring inflation under control in the gentlest way possible.

Following Monday’s market sensitivity to the ISM Manufacturing PMI and sub-components, today’s US stats will influence. ADP nonfarm employment and ISM Non-Manufacturing PMI figures will be in the spotlight.

Weak ADP numbers could support the declining prospects of a 75-basis point Fed rate hike. However, dire ISM Non-Manufacturing numbers may reignite recession fears and test buyer demand. Following the NASDAQ 100’s 3.34% rally on Tuesday, the NASDAQ Mini was down 85.75 points this morning.

Away from the numbers, investors will also need to consider FOMC member chatter and any move away from the recent hawkish commentary. There’s also updates on Elon Musk’s Twitter (TWTR) plans to consider.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 1.29% to $20,081. A bearish morning saw BTC fall from an early high of $20,363 to a low of $20,020.

Technical Indicators

BTC needs to move through the $20,130 pivot to target the First Major Resistance Level (R1) at $20,757. Today’s US economic indicators and FOMC member chatter would need to be crypto-friendly to support a breakout from the Tuesday high of $20,543.

In the case of a crypto rebound, BTC would take a run at the Second Major Resistance Level (R2) at $21,171. The Third Major Resistance Level (R3) sits at $22,212.

Failure to move through the pivot would leave the First Major Support Level (S1) at $19,716 in play. Barring an extended sell-off, BTC should avoid sub-$19,500 and the Second Major Support Level (S2) at $19,089. The Third Major Support Level (S3) sits at $18,048.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bullish signal. This morning, bitcoin sat above the 200-day EMA, currently at $19,911.

The 50-day EMA crossed through the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering the bullish price signals.

Following the bullish cross, a BTC hold above the 200-day EMA ($19,911) would support a breakout from R1 ($20,757) to target R2 ($21,171). However, a fall through the 200-day EMA ($19,911) would give the bears a run at S1 ($19,716) and the 50-day ($19,568), and the 100-day ($19,567) EMAs.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 1.44% to $1,342.

A bearish morning saw ETH fall from an early high of $1,365 to a low of $1,341.

Technical Indicators

ETH needs to move through the $1,350 pivot to target the First Major Resistance Level (R1) at $1,382. Sentiment across the broader crypto market would need to shift to support a breakout from the Tuesday high of $1,370.

In the event of an extended rally supported by crypto-friendly US stats, the Second Major Resistance Level (R2) at $1,401 would likely cap the upside. The Third Major Resistance Level (R3) sits at $1,452.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,331 in play. Barring an extended US session sell-off, ETH should avoid sub-$1,300 and the Second Major Support Level (S2) at $1,299.

The Third Major Support Level (S3) sits at $1,248.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 100-day EMA, currently at $1,361. The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA pulled back from the 200-day EMA, delivering mixed signals.

An ETH breakout from the 100-day EMA ($1,361) would give the bulls a run at R1 ($1,382) and $1,400. However, a slide through the 50-day EMA ($1,332) and S1 ($1,331) would bring sub-$1,300 support levels into play.