ETH and a Return to $1,600 in the Hands of the SEC and the Fed

Key Insights:

• It was a bearish Sunday session for bitcoin (BTC) and ethereum (ETH), though BTC revisited the $22,000 handle for the first time in three sessions.
• Fed Fear and US Regulatory Risk continued to weigh on investor sentiment.
• This morning, ETH and BTC found modest support but face the risk of another sell-off.

Ethereum (ETH) fell by 1.56% on Sunday. Partially reversing a 1.72% gain from Saturday, ETH ended the week down 7.00% to $1,515. ETH revisited sub-$1,500 for the second time since January 14.

After a range-bound morning, ETH rose to a late afternoon high of $1,548. Coming up short of the First Major Resistance Level (R1) at $1,554, ETH slid to a late low of $1,494. ETH fell through the First Major Support Level (S1) at $1,515 before ending the day at $1,515.

On Sunday, bitcoin (BTC) fell by 0.32%. Partially reversing a 1.04% gain from Saturday, BTC ended the week down 4.94% to $21,796. BTC wrapped up the day at sub-$22,000 for the fourth consecutive session while revisiting $22,000 for the first time in three sessions.

After a mixed morning session, BTC rose to a late afternoon high of $22,096. Coming up short of the First Major Resistance Level (R1) at $21,977, BTC slid to a late low of $21,666. BTC briefly fell through the First Major Support Level (S1) at $21,684 before ending the day at $21,796.

Ethereum Hard Fork Overshadowed by the Fed and the SEC

On Sunday, market sentiment toward the latest SEC regulatory moves across the digital asset space continued to weigh. With the SEC targeting crypto staking services, increased regulatory uncertainty will remain a headwind until an appropriate regulatory framework is in place.

The Wall Street Journal reported that the SEC might sue Paxos for violating investor protection laws relating to the launch of BinanceUSD (BUSD). The latest news suggests that the SEC will target the entire space rather than staking services.

Fed Fear added to the bearish sentiment as investors await the US CPI Report. A pickup in US inflationary pressure would support a more hawkish policy outlook and an interest rate peak of beyond 5%.

The bearish sentiment overshadowed Ethereum Shanghai hard news. On Friday, Ethereum announced the second round of testing of staked ETH withdrawals. The Sepolia testnet follows the Zhejiang testnet and precedes the Goerli testnet and the heavily anticipated Shanghai hard fork.

Currently, the Shanghai hard fork is to take place in March.

Today, investors need to continue monitoring the crypto news wires. While Shanghai hard fork updates will provide direction, SEC activity and FOMC member chatter will likely draw more interest.

With tomorrow’s CPI Report in focus, we expect the NASDAQ Composite Index to influence the afternoon session.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.24% to $1,519. A mixed morning saw ETH rise to an early high of $1,525 before falling to a low of $1,497.

Technical Indicators

ETH needs to avoid a fall through the $1,519 pivot to target the First Major Resistance Level (R1) at $1,544 and the Sunday high of $1,548. A return to $1,550 would signal a breakout session. However, Shanghai hard fork updates 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 $1,573 and resistance at $1,600. The Third Major Resistance Level (R3) sits at $1,627.

A fall through the pivot would bring the First Major Support Level (S1) at $1,490 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,450. The Second Major Support Level (S2) at $1,465 should limit the downside. The Third Major Support Level (S3) sits at $1,411.

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 $1,545. After a bearish cross on Saturday, the 50-day EMA pulled further back from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A move through R1 ($1,544) and the 200-day EMA (1,545) would give the bulls a run at R2 ($1,573) and the 50-day EMA ($1,575). However, failure to move through the 200-day EMA ($1,545) would leave S1 ($1,490) in view. A move through the 50-day EMA would send a bullish signal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.12% to $21,823. A mixed start to the day saw BTC rise to an early high of $21,884 before falling to a low of $21,634.

Technical Indicators

BTC needs to move through the $21,853 pivot to target the First Major Resistance Level (R1) at $22,039 and the Sunday high of $22,096. A return to $22,000 would signal a breakout session. The crypto news wires need to be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $22,283. The Third Major Resistance Level (R3) sits at $22,713.

Failure to move through the pivot would leave the First Major Support Level (S1) at $21,609 in play. However, barring another risk-off-fueled crypto sell-off, BTC should avoid sub-$21,000. The Second Major Support Level (S2) at $21,423 should limit the downside. The Third Major Support Level (S3) sits at $20,993.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. BTC sat above the 200-day EMA ($21,716). After a bearish cross on Saturday, the 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A hold above the 200-day EMA (21,716) would support a breakout from R1 ($22,039) to target R2 ($22,283) and the 50-day EMA ($22,316). However, a fall through the 200-day EMA ($21,716) would bring S1 ($21,609) and sub-$21,500 into view. A move through the 50-day EMA would signal a near-term bearish trend reversal.